13.

Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $464,000 or a new model 240 machine costing $405,000 to replace a machine that was purchased 10 years ago for $439,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.

Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $405,000 in the new machine, the money could be invested in a project that would return a total of $456,000.

In making the decision to buy the model 240 machine rather than the model 370 machine, the differential cost was:

$34,000$59,000$25,000$17,000

14.

Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual direct labor-hours and incurred $520,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 52,000 direct labor-hours during the year and incur $468,000 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was:

underapplied by $27,000underapplied by $25,000overapplied by $27,000overapplied by $25,000

15.

Cribb Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 11,400 hours and the total estimated manufacturing overhead was $255,360. At the end of the year, actual direct labor-hours for the year were 11,100 hours and the actual manufacturing overhead for the year was $244,840. Overhead at the end of the year was:(Round your intermediate calculations to 2 decimal places.)

$8,800 overapplied$3,800 overapplied$3,800 underapplied$8,800 underapplied

16.

The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,056. A total of 34 direct labor-hours and 257 machine-hours were worked on the job. The direct labor wage rate is $14 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $21 per machine-hour. The total cost for the job on its job cost sheet would be:

$5,304 $7,929 $4,885 $10,074

17.

During October, Dorinirl Corporation incurred $65,400 of direct labor costs and $9,200 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

credit to Work in Process of $74,600debit to Work in Process of $65,400debit to Work in Process of $74,600

credit to Work in Process of $65,400

18.

During October, Beidleman Inc. transferred $60,900 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $65,930. The journal entries to record these transactions would include a:

credit to Work in Process of $60,900 credit to Finished Goods of $60,900 debit to Finished Goods of $65,930 credit to Cost of Goods Sold of $65,930

19.

Compute the amount of raw materials used during August if $30,000 of raw materials were purchased during the month and the inventories were as follows:

Inventories	Balance August 1	Balance August 31
Raw materials	$2,600	$1,600
Work in process	$12,000	$19,000
Finished goods	$34,000	$17,000

$20,600 $31,000 $34,200 $19,000

20.

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $57,900 and at the end of the month was $50,000. The cost of goods manufactured for the month was $259,000. The actual manufacturing overhead cost incurred was $176,900 and the manufacturing overhead cost applied to Work in Process was $164,000. The adjusted cost of goods sold that would appear on the income statement for July is:

$279,800 $254,000 $251,100 $266,900

21.

Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $97,200 and 3,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $99,200 and actual direct labor-hours were 2,850.

The applied manufacturing overhead for the year was closest to:(Round your intermediate calculations to 2 decimal places.)

$94,020 $89,364 $97,188 $92,340

22.

Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $72,160 and 2,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $74,260 and actual direct labor-hours were 2,050.

The overhead for the year was:(Round your intermediate calculations to 2 decimal places.)

$7,020 overapplied $4,920 underapplied $7,020 underapplied $4,920 overapplied

23 &24.

[The following information applies to the questions displayed below.]

Meyers Corporation had the following inventory balances at the beginning and end of November:

	November 1		November 30
Raw Materials	$	64,000		$	24,000
Finished Goods	$	176,000		$	120,000
Work in Process	$	32,000		$	40,000

During November, $136,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labor-hour, and it paid its direct labor workers $12 per hour. A total of 800 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $16,000 of direct materials cost. The Corporation incurred $96,000 of actual manufacturing overhead cost during the month and applied $88,000 in manufacturing overhead cost.

23. Required information

The direct materials cost in the November 1 Work in Process inventory account totaled:

$25,600 $22,400 $9,600 $16,000 24. Required information

The actual direct labor-hours worked during November totaled:(Round your answers to the nearest dollar.)

12,000 hours 11,000 hours 7,333 hours 8,000 hours

25.

During February, Irving Corporation incurred $97,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $91,000.

The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:

credit to Manufacturing Overhead of $97,000 credit to Work in Process of $91,000 debit to Manufacturing Overhead of $97,000 debit to Work in Process of $91,000