Difficulty: 2 LO: 2-4 EOC Ref: E2-19 AACSB: Analytic Skills AICPA Business Perspective Competencies: Critical Thinking Functional Competencies: Measurement 2.4-12 Buncombe Company presents the following cost data for 2009: Estimated manufacturing overhead costs $240,000 Estimated direct labor cost $300,000 Estimated direct labor hours 30,000 Actual direct cost $315,000 Actual direct labor hours 33,000 Allocation base: Direct labor cost Other expenses: Factory depreciation on equipment $65,300 Factory rent $51,000 Factory utilities $28,900 Factory property taxes $26,000 Indirect labor $23,800 Indirect materials $32,000 Sales commissions $52,500 What is the manufacturing overhead rate? A) 76% of direct labor cost B) 125% of direct labor cost C) 80% of direct labor cost D) 105% of direct labor cost Answer: C Difficulty: 2 LO: 2-4 EOC Ref: E2-19 AACSB: Analytic Skills AICPA Business Perspective Competencies: Critical Thinking AICPA Functional Competencies: Measurement 2.4-13 Daniel Company's manufacturing overhead account showed a $4,500 overallocated balance at the end of 2005. Actual overhead incurred was $95,000. Other accounts showed the following balances: Materials inventory $10,000 Work in process inventory $30,000 Finished goods inventory $45,000 Cost of goods sold $275,000 The entry to close the manufacturing overhead account would include which of the following? A) Credit to work in process for $4,500 B) Debit to work in process for $4,500 C) Debit to cost of goods sold for $4,500 D) Debit to manufacturing overhead for $4,500
Difficulty: 2 LO: 2-4 EOC Ref: E2-19 AACSB: Analytic Skills AICPA Business Perspective Competencies: Critical Thinking Functional Competencies: Measurement 2.4-12 Buncombe Company presents the following cost data for 2009: Estimated manufacturing overhead costs $240,000 Estimated direct labor cost $300,000 Estimated direct labor hours 30,000 Actual direct cost $315,000 Actual direct labor hours 33,000 Allocation base: Direct labor cost Other expenses: Factory depreciation on equipment $65,300 Factory rent $51,000 Factory utilities $28,900 Factory property taxes $26,000 Indirect labor $23,800 Indirect materials $32,000 Sales commissions $52,500 What is the manufacturing overhead rate? A) 76% of direct labor cost B) 125% of direct labor cost C) 80% of direct labor cost D) 105% of direct labor cost Answer: C Difficulty: 2 LO: 2-4 EOC Ref: E2-19 AACSB: Analytic Skills AICPA Business Perspective Competencies: Critical Thinking AICPA Functional Competencies: Measurement 2.4-13 Daniel Company's manufacturing overhead account showed a $4,500 overallocated balance at the end of 2005. Actual overhead incurred was $95,000. Other accounts showed the following balances: Materials inventory $10,000 Work in process inventory $30,000 Finished goods inventory $45,000 Cost of goods sold $275,000 The entry to close the manufacturing overhead account would include which of the following? A) Credit to work in process for $4,500 B) Debit to work in process for $4,500 C) Debit to cost of goods sold for $4,500 D) Debit to manufacturing overhead for $4,500
Test-Bank-for-Managerial-Accounting.docx