2. Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $194,000 of raw materials on credit; issued materials to production of $209,000 of which $16,000 were indirect. Minstrel incurred a factory payroll of $153,000, of which $26,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $190,000 during the month, compute the amount of under- or overapplied overhead:

a. 37000 underapplied

b. 500 underapplied

c. 39500 overapplied

d. 500 overapplied

e. 37000 overapplied

6. Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $113,500 and $125,100, respectively. During the year, actual overhead was $107,500 and actual direct labor cost was $119,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include (Round predetermined overhead rate to nearest whole percentage.)

a. a debit to COGS for 790

b. a credit to COGS for 790

c. a credit to finished goods inventory for 790

d. a debit to work in process inventory for 790

e. a credit to factory overhead for 790

7.

The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.

Work in Process Inventory
Beginning WIP	6,400
Direct materials	49,000
Direct labor	31,500
Applied overhead	17,700
To finished goods			?
Ending WIP	12,700

The cost of jobs transferred to finished goods is:

a. 104600

b. 117300

c. 102800

d. 98200

e. 91900