Managerial Accounting Assignment

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Managerial Accounting Assignment-2
Prof. Murtaza J. Bhatti

Please submit a separate answer sheet, with the answers carefully numbered as mentioned here.

1. At the beginning of the year, manufacturing overhead for the year was estimated to be $670,530. At the end of the year, actual direct labor-hours for the year were 29,400 hours, the actual manufacturing overhead for the year was $665,530, and manufacturing overhead for the year was under-applied by $27,550. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:

2. Carver Company produces a product which sells for $40. Variable
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At the end of the year, actual direct labor-hours for the year were 9,700 hours, the actual manufacturing overhead for the year was $143,350, and manufacturing overhead for the year was underapplied by $18,220. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:

13. In the Vasquez Company, any over- or underapplied overhead is closed out to Cost of Goods Sold. Last year, the company incurred $27,000 in actual manufacturing overhead cost, and applied $29,000 of overhead cost to jobs. The beginning and ending balances of Finished Goods were equal, and the Company 's Cost of Goods Manufactured for the year totaled $71,000. Given this information, Cost of Goods Sold, after adjustment for any over- or underapplied overhead, for the year must have been:

14. Jensen Manufacturing uses a job order cost system. Overhead is applied at the rate of $20 per direct labor hour. Job #777 includes $2,000 of direct labor cost and 150 direct labor hours. $1,500 of indirect labor cost was actually incurred. The proper journal entry to record the wage related cost is: a) Debit Work in Process, $3,500; Credit Wages Payable, $3,500. b) Debit Wage Expense, $3,500; Credit Wages Payable, $3,500. c) Debit Work in Process, $2,000; Debit Factory Overhead, $1,500; Credit Wages Payable, $3,500. d) Debit Work in Process, $3,500; Credit Factory Overhead, $1,500; Credit Wage Expense, $2,000.

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