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Chapters 1-2 If the cost of goods sold is greater than the cost of goods manufactured, then: a. Work in process inventory has decreased during the period. Finished goods inventory has increased during the period. Total manufacturing costs must be greater than cost of goods manufactured. d. Finished goods inventory has decreased during the period. b. c. An example of a period cost is: fire insurance on a factory building. b. salary of a factory supervisor. direct materials rent on a headquarters building For a manufacturing company, which of the following is an example of a period rather than a product cost? a. Depreciation of factory equipment. Wages of salespersons. Wages of machine operators. Insurance on factory equipment. C. Which of the following would be considered a product cost for external financial reporting purposes? Cost of a warehouse used to store finished goods. b. Cost of guided public tours through the company's facilities. Cost of travel necessary to sell the manufactured product. Cost of sand spread on the factory floor to absorb oil from manufacturing machines. d. The plant layout under the JIT concept emphasizes: A functional approach in which machines performing the same function are grouped together. A product approach in which all machines needed in the production of a particular product are grouped together. A facilities approach in which all machines of a similar nature are located in one plant building. A concentrated approach in which the processing certain subassemblies is performed by a small number of independent machine shops under contract to the manufacturing company. Sawyer Manufacturing Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the company worked 57.000 actual direct labor hours and incurred $345,000 of actual manufacturing overhead cost. The Company had estimated that it would work 55,000 direct labor hours during the year and incur $330.000 of manufacturing overhead cost. The Company's manufacturing overhead cost for the year was Overapplied by $15,000 Underapplied by $15,000 Overapplied by $3,000 Underapplied by $3,000 7. The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs, the predetermined overhead rate is based on labor cost in Dent A and on machine hours in Dept. B. At the beginning of the year, the company made the following estimates: Dept. B $40,000 Direct Labor Cost Manufacturing Overhead Direct Labor Hours Machine Hours Dept. A $30,000 60,000 6,000 2,000 50,000 8,000 10,000 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? 50% and $8.00 50% and $5.00 $15 and 110% 200% and $5.00 Overapplied manufacturing overhead means that: a, the applied manufacturing overhead cost was less than the actual manufacturing overhead cost. b. the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost. c. the estimated manufacturing overhead cost was less than the actual manufacturing overhead cost. d. the estimated manufacturing overhead cost was less than the applied manufacturing overhead cost. 9. In a job-order costing system, the application of manufacturing overhead would be recorded as a debit to: a. Raw Materials inventory. b. Finished Goods inventory. c. Work in Process inventory. d. Cost of Goods Sold. 10. Green Company's cost for the month of August were as follows: direct materials, $27,000; direct labor. $34.000 sales salaries, $14,000; indirect labor, $10,000; indirect material, $15,000; general corporate administrative cost $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process Inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month? $105,000 $132,000 $138,000 d. $112,000 Chapters 1-2 If the cost of goods sold is greater than the cost of goods manufactured, then: a. Work in process inventory has decreased during the period. Finished goods inventory has increased during the period. Total manufacturing costs must be greater than cost of goods manufactured. d. Finished goods inventory has decreased during the period. b. c. An example of a period cost is: fire insurance on a factory building. b. salary of a factory supervisor. direct materials rent on a headquarters building For a manufacturing company, which of the following is an example of a period rather than a product cost? a. Depreciation of factory equipment. Wages of salespersons. Wages of machine operators. Insurance on factory equipment. C. Which of the following would be considered a product cost for external financial reporting purposes? Cost of a warehouse used to store finished goods. b. Cost of guided public tours through the company's facilities. Cost of travel necessary to sell the manufactured product. Cost of sand spread on the factory floor to absorb oil from manufacturing machines. d. The plant layout under the JIT concept emphasizes: A functional approach in which machines performing the same function are grouped together. A product approach in which all machines needed in the production of a particular product are grouped together. A facilities approach in which all machines of a similar nature are located in one plant building. A concentrated approach in which the processing certain subassemblies is performed by a small number of independent machine shops under contract to the manufacturing company. Sawyer Manufacturing Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the company worked 57.000 actual direct labor hours and incurred $345,000 of actual manufacturing overhead cost. The Company had estimated that it would work 55,000 direct labor hours during the year and incur $330.000 of manufacturing overhead cost. The Company's manufacturing overhead cost for the year was Overapplied by $15,000 Underapplied by $15,000 Overapplied by $3,000 Underapplied by $3,000 7. The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs, the predetermined overhead rate is based on labor cost in Dent A and on machine hours in Dept. B. At the beginning of the year, the company made the following estimates: Dept. B $40,000 Direct Labor Cost Manufacturing Overhead Direct Labor Hours Machine Hours Dept. A $30,000 60,000 6,000 2,000 50,000 8,000 10,000 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? 50% and $8.00 50% and $5.00 $15 and 110% 200% and $5.00 Overapplied manufacturing overhead means that: a, the applied manufacturing overhead cost was less than the actual manufacturing overhead cost. b. the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost. c. the estimated manufacturing overhead cost was less than the actual manufacturing overhead cost. d. the estimated manufacturing overhead cost was less than the applied manufacturing overhead cost. 9. In a job-order costing system, the application of manufacturing overhead would be recorded as a debit to: a. Raw Materials inventory. b. Finished Goods inventory. c. Work in Process inventory. d. Cost of Goods Sold. 10. Green Company's cost for the month of August were as follows: direct materials, $27,000; direct labor. $34.000 sales salaries, $14,000; indirect labor, $10,000; indirect material, $15,000; general corporate administrative cost $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process Inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month? $105,000 $132,000 $138,000 d. $112,000