Question 3 Crane, Inc. manufactures ergonomically designed computer furniture. Crane uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs: Job No. CC723 CH291 P5812 Item Computer caddy Chair Printer stand Units 21,000 18,000 26,000 Accumulated Cost $1,000,000 431,000 271,000 $1,702,000 On November 30, Crane's Raw Materials Inventory account totaled $684,000, and its Finished Goods Inventory totaled $3,497,400. Crane applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totaled $4,500,000, and the company planned to use 900,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 834,000 machine hours, total manufacturing overhead amounted to $4,294,500, and Cost of Goods Sold was $4,274,500. Crane purchased $8,750,250 in raw materials in December and incurred the following costs for jobs in process that month: Job No. CC723 CH291 PS812 DS444 Materials Issued $165,000 $18,800 S238,000 $257,000 Machine Hours 18.000 4,700 22,000 20,000 Direct Labor Hours 12,700 4,000 14,300 15,500 Direct Labor Cost $127,400 $44,200 $228,500 $141,000 The following jobs were completed in December and transferred to the Finished Goods Inventory: Job No. CC723 CH291 DS444 Item Computer caddy Chair Desk Units 21,000 18,000 10,000 Assume that Crane sold 15,000 computer caddies, 11,000 chairs, and 4,300 desks in December Your answer is partially correct. Try again. Crane incurred $395,000 in manufacturing overhead in December. Given that expenditure, was manufacturing overhead under- or overapplied for the year? By how much? Overhead Underapplied I 189500 SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO VIDEO Attempts: 3 of 3 used (c) Your answer is correct. Assume that Crane closes under- or overapplied overhead to the Cost of Goods Sold account. Prepare the journal entry to close the manufacturing overhead account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Cost of Goods Sold 195,000 Manufacturing Overhead verhead 196,000 5,000 SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO VIDEO Attempts: 1 of 3 used (d) x Your answer is incorrect. Try again. Assume that Crane prorates under-or overapplied overhead to the appropriate accounts. Calculate the allocated amounts and adjust the account balances as needed. (Round % of total to 1 decimal places, e.g. 52.7% and and final answers to 0 decimal places e.g. 5,275.) Allocation Adjusted Balance 1702000 Work In Process 3497400 79300 Finished Goods $U t * 4274500 196000 Cost of Goods Sold $
