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Exam 25: Manufacturing Accounting

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Question 21

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A material requisition is a:

A) document prepared to show the movement of materials or products between departments.
B) document used to order materials or supplies from the vendor or supplier.
C) document used for charging material to production.
D) document used to record receipt of materials or supplies from the vendor or supplier.

E) A) and D)
F) All of the above

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Question 22

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The major difference on the balance sheet of a manufacturing company when compared to a merchandise company is to include:

A) a retained earnings section.
B) three inventory accounts,rather than one.
C) prepaid expenses.
D) accrued payroll.

E) None of the above
F) B) and C)

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Question 23

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Calculate the cost of goods manufactured from the following information. $\begin{array} { l r } \text { Beginuing Raw Materials Inventory: } & \$ 63,000 \\\text { Ending Raw Materials Inventory: } & 58,000 \\\text { Overhead: } & 36,000 \\\text { Beginning Finished Goods Inventory: } & 27,000 \\\text { Ending Finished Goods Inventory: } & 32,000 \\\text { Direct Labor: } & 42,000 \\\text { Raw Materials Purchased: } & 73,000 \\\text { Beginning Work-in-Process Inventory: } & 12,000 \\\text { Ending Work-in-Process Inventory: } & 15,000\end{array}$

The accrual for the direct labor at the end of the year was not prepared.This error will cause:

Sylvan Manufacturing applies overhead based on direct labor hours.At the beginning of the year,it estimated that overhead costs would be $150,000 and direct labor hours would be 15,000.The applied overhead rate per direct labor hour is:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement(s) on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \\\hline \begin{array} { l } \text { Work in process } \\\text { inventory }\end{array} & & & & \\\hline\end{array}$

Seascape Interiors produces artist supplies.Listed below are the costs of production and inventory. $\begin{array} { l r } \text { Direct Labor } & \$ 60,000 \\\text { Raw Materials Inventory, Aug. } 1 & 45,000 \\\text { Raw Materials Purchases } & 75,000 \\\text { Raw Materials Inventory, Aug. } 31 & 25,000 \\\text { Overhead } & 50,000 \\\text { Work-in-Process Inventory Aug. } 1 & 21,000 \\\text { Work-in-Process Inventory Aug. } 31 & 27,000 \\\text { Finished Coods Inventory Aug. } 31 & 18,000\end{array}$ Compute: a.Cost of raw materials used in production b.Total manufacturing costs c.Total cost of goods manufactured

Raw Material Inventory is credited and Work-in-Process Inventory is debited when raw material is transferred to production.

From the following,calculate the cost of raw materials used,total manufacturing costs and cost of goods manufactured: $\begin{array} { l r } \text { Raw Materials Inventory, Sep. } 1 & \$ 10,000 \\\text { Raw Materials Inventory, Sep. } 30 & 6,000 \\\text { Work-in-Process Inventory, Sep. } 1 & 12,000 \\\text { Work-in-Process Inventory, Sep. } 30 & 15,000 \\\text { Raw Materials Purchased } & 25,000 \\\text { Direct Labor } & 20,000 \\\text { Depreciation Expense } & 6,000 \\\text { Factory Utilities } & 4,000\end{array}$

The bill of lading is a formal document issued to the carrier for shipping the finished product to a customer.

Direct labor for the month is $50,000,and overhead is applied based on direct labor cost.Annual overhead is estimated to be $450,000,and annual direct labor is estimated to be $800,000.What is the entry to apply overhead to production?

The Raw Materials Inventory,Work-in-Process Inventory,and Finished Goods Inventory accounts appear on the manufacturing worksheet in the:

Screws,electricity for manufacturing,and production supervisor salary are examples of:

The work-in-process beginning inventory was understated.This error will cause:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement(s) on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column 1 } & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \\\hline \begin{array} { l } \text { Accounts } \\\text { receivable }\end{array} & & & & \\\hline\end{array}$

Finished goods inventory is listed on the schedule of cost of goods sold.

The Manufacturing Overhead-Control account is used to apply overhead costs to production.

In a manufacturing company,the purchase of raw materials on account should be recorded as follows:

Adams Manufacturing has estimated manufacturing overhead at $125,000 and has estimated direct labor of 10,000 direct labor hours at $10.00 per hour.The overhead rate per direct labor dollar would be:

Which inventory account consists of manufacturing cost of goods that are complete?