Managerial Accounting - Exam 1

Prepare the adjusting entry to assign the underapplied overhead for the year to cost of goods sold

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Answer explanation

Dr: Cost of Good Sold

Cr: Manufacturing Overhead

Total factory labor costs related to factory workers for Cullumber Company during January are $75,600. Of the total accumulated cost of factory labor, 90% is related to direct labor and 10% is attributable to indirect labor.

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Answer explanation

Jan 31. Factory Labor 75,600

Payroll Liabilities 75,600

Jan 31. Work in Process Inventory 68,040

Manufacturing Overhead 7,560

Factory Labor 75,600

During the current month, Sheridan Company incurs the following manufacturing costs

a.) Purchased Raw Materials of $21,200 on account

b.) Incurred factory labor of $45,600

c.) Factory utilities of $3,290 are payable, prepaid factory insurance of $3,010 have expired, and factory depreciation on the factory building is $11,000

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Answer explanation

a.) Raw Materials Inventory 21,200

Account Payable 21,200

b.) Factory Labor 45,600

Payroll Liabilities 45,600

c.) Manufacturing Overhead 17,300

Prepaid Insurance 3,010

Accumulated Depreciation 11,000

Utilities Payable 3,290

A process cost system is used when each finished unit is indistinguishable from another

• True

• False

In a process cost system, only one work in process inventory is used

• True

• False

Determine the total amount of Manufacturing Overhead

Determine the total amount of Period Costs

Determine the total amount of Product Costs

Depreciation on factory equipment

• Manufacturing overhead

• Period Costs

• Direct Materials

• Direct Labor

Wages of workers assembling laptop computers

(Gala Company is a manufacturer of laptop Computers)

• Manufacturing overhead

• Period Costs

• Direct Materials

• Direct Labor