1.

Compute the Work-in-Process transferred to the finished goods warehouse on April 30 using
the following information:
Work-In-Process Inventory, April 30 $ 345
Direct materials purchased during April 320
Work-In-Process Inventory, April 1 370
Direct labor costs incurred 470
Manufacturing overhead costs 420
Direct materials used in production 295

A. $1,160
B. $1,185
C. $1,210
D. $1,260

BB + TI − TO = EB
$370 + ($295 + $470 + $420) − TO = $345
TO = $370 + ($295 + $470 + $420) − $345 = $1,210

2. The following events took place at a manufacturing company for the current year:

1. (1) Purchased $103,000 in direct materials.

2. (2) Incurred labor costs as follows: (a) direct, $64,000 and (b) indirect, $21,600.
3. (3) Other manufacturing overhead was $115,000, excluding indirect labor.
4. (4) Transferred 75% of the materials to the manufacturing assembly line.
5. (5) Completed 60% of the Work-in-Process during the year.
6. (6) Sold 80% of the completed goods.
7. (7) There were no beginning inventories.

What is the company's Cost of Goods Sold?

A. $166,710
B. $133,368
C. $277,850
D. $222,280

RM = 0+103,000; TO FROM RM = 103,000X0.75 = $77,250 (DM)

WIP-COSTS INCURRED-IN THE PEROD = 64,000+77,250+(21,600+115,000) = $277,850
WIP-COGM = 0+277,850-277,850X0.6 = $166,710
FG = 0+166,710 – 166,710X0.8 = $33,342
COGS = 133,368
 3. The following events took place at a manufacturing company for the current year:

1. (1) Purchased $96,800 in direct materials.

2. (2) Incurred labor costs as follows: (a) direct, $57,800 and (b) indirect, $15,400.
3. (3) Other manufacturing overhead was $108,800, excluding indirect labor.
4. (4) Transferred 80% of the materials to the manufacturing assembly line.
5. (5) Completed 65% of the Work-in-Process during the year.
6. (6) Sold 85% of the completed goods.
7. (7) There were no beginning inventories.

What is the value of the ending Work-in-Process Inventory?

A. $13,621.50
B. $14,637.00
C. $90,804.00
D. $97,634.50

RM =0+96,800 – 96,800X0.8 (DM) = $19,369

WIP-COSTS INCURREN IN THE PERIOD = (DM)77,440+(DL)57,800+(MOH)124,200 = $259,440
WIP = 0+259,440 – 168,636 = $90,804
MOH = 15,400+108,800 = $124,200

4. The following events took place at a manufacturing company for the current year:

1. (1) Purchased $96,600 in direct materials.

2. (2) Incurred labor costs as follows: (a) direct, $57,600 and (b) indirect, $15,200.
3. (3) Other manufacturing overhead was $108,600, excluding indirect labor.
4. (4) Transferred 80% of the materials to the manufacturing assembly line.
5. (5) Completed 65% of the Work-in-Process during the year.
6. (6) Sold 85% of the completed goods.
7. (7) There were no beginning inventories.

What is the value of the ending Finished Goods Inventory?

A. $13,581.50
B. $25,221.30
C. $27,121.00
D. $168,142.00

RM =0+96,600 – 96,600X0.8 (DM) = $19,320

WIP-COSTS INCURREN IN THE PERIOD = (DM)77,280+(DL)57,600+(MOH)123,800 = $258,680
WIP = 0+258,680 – 168,142 = $90,358; COGM = $168,142; MOH = 15,200+108,600 = $123,800
FG = 168,142 – 168,142X0.85 = 168,142 – 142,920.7 = $25,221.3
 5. The journal entry to record the issuance of direct materials represented by the following
materials requisitions for the month includes:
Requisition
Description Amount
Number

372 Job Number 179 $ 7,250

373 Job Number 184 $ 5,700

374 Job Number 180 $ 6,525

375 General factory use $ 925

376 Job Number 182 $ 4,470

A. a debit to Materials Inventory, $23,945.

B. a debit to Materials Inventory, $24,870.
C. a debit to Work-in-Process Inventory, $23,945.
D. a credit to Work-in-Process Inventory, $24,870.

$7,250 + $5,700 + $6,525 + $4,470 = $23,945 to Work-in-Process Inventory

The $925 for general factory use would be indirect materials, not direct.
 6. The financial records for the Harrison Manufacturing Company have been destroyed in a fire.
The following information has been obtained from a separate set of books maintained by the
cost accountant. The cost accountant now asks for your assistance in computing the missing
amounts.

Direct Materials Inventory

Cost of Goods Sold
Debit Credit
Debit Credit

Beginning 8,400 ? Transferred Out

Balance
61,000

Purchases ?

Ending Balance 6,800

Work-in-Process Inventory

Debit Credit

Beginning Balance 7,900 ? Transferred Out

Materials 18,800

Labor 13,900
 Work-in-Process Inventory

Finished Goods Inventory

Debit Credit

Debit Credit
Overhead 8,400

Beginning Balance ? ? Transferred Out

Ending Balance ?

Transferred In 39,900

Ending Balance 4,600

What is the amount of the materials purchased?

A. $15,200
B. $17,200
C. $18,800
D. $20,400

$8,400 + Purchases − $18,800 (transferred out to WIP) = $6,800; Purchases = $17,200

 7. The financial records for the Harrison Manufacturing Company have been destroyed in a fire.
The following information has been obtained from a separate set of books maintained by the
cost accountant. The cost accountant now asks for your assistance in computing the missing
amounts.

Cost of Goods
Direct Materials Inventory Sold

Debit Credit
Debit Credit

Beginning Balance 8,400 ? Transferred Out

61,000

Purchases ?

Ending Balance 6,800

Work-in-Process Inventory

Debit Credit

Beginning Balance 7,900 ? Transferred Out

Materials 18,800

Labor 13,900
 Work-in-Process Inventory

Debit Credit

Finished Goods Inventory

Debit Credit
Overhead 8,400

Ending Balance ? Beginning Balance ? ? Transferred Out

Transferred In 39,900

Ending Balance 4,600

What is the value of the ending Work-in-Process inventory balance?

A. $0
B. $4,600
C. $9,100
D. $8,400

$7,900 + $18,800 + $13,900 + $8,400 − $39,900 (Transferred to FG) = $9,100

 8. Stock Company uses a job costing system. The following debits (credits) appeared in Stock's
Work-in-Process Inventory account for the month of April:
April Description Amount

1 Balance $ 5,700

30 Direct materials 28,200

30 Direct labor 29,600

30 Factory overhead 14,500

30 To finished goods(49,700)

Stock applies overhead to production at a predetermined rate of 80% of direct labor cost. Job
Number 5, the only job still in process on April 30, has been charged with direct labor of $3,700.
What was the amount of direct materials charged to Job Number 5? (CPA adapted)

A. $3,525
B. $21,640
C. $28,300
D. $28,200

$5,700 + $28,200 + $29,600 + $14,500 − $49,700 = $28,300 (ending WIP)

$28,300 − $3,700(direct labor) − $2,960(overhead = $3,700 × 80%) = $21,640 (direct materials).

9. The following are Margin Company's production costs for December:

Direct Materials $ 118,000

Direct Labor 108,000

Factory
Overhead
8,000
What amount of costs should be traced to specific products in the production process? (CPA
adapted)

A. $234,000
B. $226,000
C. $118,000
D. $108,000 SOLUTION: DM ($118,000) + DL ($108,000) = $226,000
10. Under Eagle Company's job costing system, manufacturing overhead is applied to Work-in-
Process using a predetermined annual overhead rate. During February, Eagle's transactions
included the following:

Direct materials issued to production $ 99,000

Indirect materials issued to

production
17,000

Manufacturing overhead incurred 134,000

Manufacturing overhead applied 122,000

Direct labor costs 116,000

Eagle had neither beginning nor ending inventory in Work-in-Process Inventory. What was the cost
of jobs completed in February? (CPA adapted)

A. $320,000
B. $337,000
C. $349,000
D. $366,000

DM ($99,000) + DL ($116,000) + OH applied ($122,000) = $337,000

 11. Pigot Corporation uses job costing and the budgeted manufacturing costs for the year are as
follows:

Direct materials $ 738,000

Direct labor 209,500

Factory
overhead
628,500

The actual direct materials and direct labor costs charged to Job Number 432 during the year were
as follows:

Direct
materials
$28,800

Direct labor 17,700

Pigot applies manufacturing overhead to production orders on the basis of direct labor cost using
rates predetermined at the beginning of the year based on the annual budget. The total cost
associated with Job Number 432 for the year should be:

A. $46,500.
B. $70,800.
C. $81,900.
D. $99,600.

[($628,500 ÷ $209,500) × $17,700] + $28,800 + $17,700 = $99,600.

 12. The Falcon Company does not maintain backup documents for its computer files. In June,
some of the current data were lost, and you have been asked to help reconstruct the data.
The following beginning balances on June 1 are known:

Direct Materials Inventory $ 12,000

Work-in-Process Inventory 4,500

Finished Goods Inventory 11,000

Manufacturing Overhead
Control
16,500

Accounts Payable 6,000

Reviewing old documents and interviewing selected employees have generated the following
additional information:

The production superintendent's job cost sheets indicated that materials of $2,600 were included in
the June 30 Work-in-Process Inventory. Also, 300 direct labor-hours had been paid at $6.00 per
hour for the jobs in process on June 30.

The Accounts Payable account is only for direct material purchases. The clerk remembers clearly
that the balance in the Accounts Payable on June 30 was $8,000. An analysis of canceled checks
indicated payments of $40,000 were made to suppliers during June.

Payroll records indicate that 5,200 direct labor-hours were recorded for June. It was verified that
there were no variations in pay rates among employees during June.

Records at the warehouse indicate that the Finished Goods Inventory totaled $16,000 on June 30.

Another record kept manually indicates that the Cost of Goods Sold in June totaled $84,000.

The predetermined overhead rate was based on an estimated 60,000 direct labor-hours for the year
and an estimated $180,000 in manufacturing overhead costs.
What is the ending balance in the Work-in-Process Inventory on June 30?

A. $4,800
B. $5,300
C. $9,300
D. $9,800

$180,000 ÷ 60,000 = $3.00 per DLH; $2,600 + (300 × $6.00) + (300 × $3.00) = $5,300
13. The Falcon Company does not maintain backup documents for its computer files. In June,
some of the current data were lost, and you have been asked to help reconstruct the data.
The following beginning balances on June 1 are known:

Direct Materials Inventory $ 13,100

Work-in-Process Inventory 5,600

Finished Goods Inventory 14,100

Manufacturing Overhead
Control
27,500

Accounts Payable 7,100

Reviewing old documents and interviewing selected employees have generated the following
additional information:

The production superintendent's job cost sheets indicated that materials of $3,700 were included in
the June 30 Work-in-Process Inventory. Also, 410 direct labor-hours had been paid at $7.00 per
hour for the jobs in process on June 30.

The Accounts Payable account is only for direct material purchases. The clerk remembers clearly
that the balance in the Accounts Payable on June 30 was $9,100. An analysis of canceled checks
indicated payments of $51,000 were made to suppliers during June.

Payroll records indicate that 6,300 direct labor-hours were recorded for June. It was verified that
there were no variations in pay rates among employees during June.

Records at the warehouse indicate that the Finished Goods Inventory totaled $18,200 on June 30.

Another record kept manually indicates that the Cost of Goods Sold in June totaled $95,000.

The predetermined overhead rate was based on an estimated 71,000 direct labor-hours for the year
and an estimated $355,000 in manufacturing overhead costs.
What is the amount of direct materials purchased during June?

A. $49,000
B. $51,000
C. $53,000
D. $56,000

$7,100 + Materials Purchased − $51,000 = $9,100; Materials Purchased = $53,000.

14. Grayson Incorporated has provided the following data for the month of October. The balance
in the Finished Goods inventory account at the beginning of the month was $58,000 and at
the end of the month was $54,000. The cost of goods manufactured for the month was
$235,000. The actual manufacturing overhead cost incurred was $83,000 and the
manufacturing overhead cost applied to Work-in-Process was $79,000. Assuming any over-
or underapplied overhead is written off to Cost of Goods Sold, what amount would appear on
the income statement for Cost of Goods Sold for October?

A. $235,000
B. $239,000
C. $231,000
D. $243,000

Adjusted COGS = Beginning FGI + COGM + Actual MOH − Applied MOH − Ending FGI
= $58,000 + $235,000 + $83,000 − $79,000 − $54,000
= $243,000 Adjusted COGS

15. Delgato Corporation, a manufacturing company, has provided data concerning its operations
for September. The beginning balance in the Materials Inventory account was $39,000 and
the ending balance was $31,000. Materials purchases during the month totaled $61,000.
Manufacturing overhead cost incurred during the month was $104,000, of which $5,000
consisted of materials classified as indirect materials. The direct materials cost for November
was:

A. $64,000.
B. $61,000.
C. $69,000.
D. $53,000.

Beginning MI + TI − TO = Ending MI
Beginning MI + MI Purchases − Direct Materials − Indirect Materials = Ending MI
$39,000 + $61,000 − Direct Materials − $5,000 = $31,000
Direct Materials= $64,000
 16. Under Lamar Company's job costing system, manufacturing overhead is applied to Work-in-
Process Inventory using a predetermined overhead rate. During June, Lamar's transactions
included the following:

Direct materials issued to production $ 90,000

Indirect materials issued to

production
8,000

Manufacturing overhead cost incurred 125,000

Manufacturing overhead cost applied 113,000

Direct labor cost incurred 107,000

Lamar Company had no beginning or ending inventories. What was the cost of goods manufactured
for June? (CMA adapted)

A. $302,000.
B. $310,000.
C. $322,000.
D. $330,000.

Beginning WIP Inventory + DM + DL + Applied MOH − COGM = Ending WIP Inventory

$0 + $90,000 + $107,000 + $113,000 − COGM = $0
COGM = $310,000
 17. Carson Incorporated has provided the following data for the month of May. There
were no beginning inventories; consequently, the direct materials, direct labor, and
manufacturing overhead applied listed below are all for the current month.

Finished Cost of Goods

Work-in-Process Goods Sold Total

Direct materials $ 5,710 $ 12,200 $ 112,020 $ 129,930

Direct labor 3,130 11,200 102,340 116,670

Manufacturing overhead
applied
3,284 7,389 71,427 82,100

Total $ 12,124 $ 30,789 $ 285,787 $ 328,700

Manufacturing overhead for the month was underapplied by $10,700.

The company allocates any underapplied or overapplied overhead among work-in-process, finished
goods, and cost of goods sold at the end of the month on the basis of the overhead applied during
the month in those accounts.

The journal entry to record the allocation of any underapplied or overapplied overhead for May would
include a:

A. credit to Finished Goods Inventory of $963.

B. debit to Finished Goods Inventory of $31,300.
C. credit to Finished Goods Inventory of $31,300.
D. debit to Finished Goods Inventory of $963.

$3,284 ÷ $82,100 = 4%; $7,389 ÷ $82,100 = 9%; $71,427 ÷ $82,100 = 87%

Work-in-Process (4% × $10,700) 428

 Finished Goods (9% × $10,700) 963

Cost of Goods Sold (87% × $10,700) 9,309

Underapplied Manufacturing
Overhead
10,700

18. The following selected data were taken from the books of the Owens O-Rings Company. The
company uses job costing to account for manufacturing costs. The data relate to April
operations.

(1) Materials and supplies were requisitioned from the stores clerk as follows:

Job 405, material X, $7,700.

Job 406, material X, $3,700; material Y, $6,700.
Job 407, material X, $7,700; material Y, $3,900.
For general factory use: materials A, B, and C, $3,000.

(2) Time tickets for the month were chargeable as follows:

Job 405 $ 14,000 3,700 hours

Job 406 14,700 4,300 hours

Job 407 8,700 2,600 hours

Indirect labor 4,400

(3) Other information:

Factory paychecks for $37,400 were issued during the month.

Various factory overhead charges of $20,100 were incurred on account.
Depreciation of factory equipment for the month was $6,100.
Factory overhead was applied to jobs at the rate of $3.90 per direct labor hour.
Job orders completed during the month: Job 405 and Job 406.
Selling and administrative costs were $2,800.
Factory overhead is closed out only at the end of the year.

What is the total cost of Job 406?

 A. $6,630
B. $5,000
C. $22,700
D. $41,870

Direct materials + Direct labor + Manufacturing overhead = Total cost

($3,700 + $6,700) + $14,700 + ($3.90 × 4,300) = $41,870

19. The journal entry to record the completion of a job in a job costing system is:

xx
A. Finished Goods Inventory
x

Materials Inventory xxx

B. Work-In-Process Inventory xxx

Applied Manufacturing
Overhead
xxx

C Manufacturing Overhead
. Control
xxx

Finished Goods Inventory xxx

D
.
Finished Goods Inventory xxx

Work-In-Process
Inventory
xxx

A. Option A
B. Option B
C. Option C
D. Option D

Completed jobs are transferred from Work-in-Process Inventory to Finished Goods Inventory.
20. Before prorating the manufacturing overhead costs at the end of 2023, the Cost of Goods
Sold and Finished Goods Inventory accounts had applied overhead costs of $58,000 and
$25,000 in them, respectively. There was no Work-in-Process at the beginning or end of
2023. During the year, manufacturing overhead costs of $79,000 were actually incurred. The
balance in the Applied Manufacturing Overhead was $83,000 at the end of 2023. If the
under- or overapplied overhead is prorated between Cost of Goods Sold and the inventory
accounts, how much will be allocated to the Finished Goods Inventory?
Note: Rounded to the nearest whole dollar.

A. $1,205
B. $1,724
C. $1,781
D. $2,795 $83,000 − $79,000 = $4,000 overapplied overhead; ($25,000 ÷ $83,000) × $4,000 = $1,205