Question

Kelsh Company has the following estimated costs for next year: $ 10,000 30,000 40,000 20,000 4.000 1. Direct materials Direct labor Sales commissions Salary of production supervisor Indirect materials Advertising expense Rent on factory equipment 8,000 10,000 Kelsh estimates that 10,000 machine hours will be worked during the year. The overhead rate per machine hour will be (Hint: Choose which of the above costs are Overhead costs, add them together, and divide the total by 10,000): a.$6.80. Os3.40. d. S8.20 b.S6.40. 1 2. The following entry would be made to apply $24,000 of overhead costs to products: 24,000 Manufacturing Overhead Work in Process 24,000 a. true b.false A credir balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied. a. true 3. O false The journal entry to record when a job is finished would include a: a. debit to Cost of Goods Sold Idebit to Finished Goods Inventory. 4. b. credit to Finished Goods Inventory debit to Work in Process Inventory A company that mass produces identical units would use process costing, rather than job-order costing 5. true b. false 6. A company that uses job-order costing will maintain a separate Work in Process Inventory account for each job under construction. a) true b. false

Answer 1

1)	Salary of production supervisor			20,000
	indirect materials			4,000
	Rent of factory equipment			10,000
	total overhead			34,000
	overhead rate per MH=			34000/10,000
				3.4	answer
2)	FALSE
	work in process will be debited and MOH will be credited
3)	FALSE
	actual overhead is debited and applied is credited , hence
	credit balance means overhead is over applied
4)	option c
	debit to Finished goods inventory
	the goods are transferred from WIP to finished hence finished inventory
	is debited
5)	opion a
	TRUE
	process costing is used for homogeneous products and for mass
	production
6)	option a
	TRUE
	since each job is customized hence separate job cost sheet for
	each job