112.Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. What journal entry should Andrew use to account for direct materials used in March?
A.Debit Raw Materials Inventory $141,000; credit Accounts Payable $141,000.
B.Debit Work in Process Inventory $141,000; credit Raw Materials Inventory $141,000.
C.Debit Work in Process Inventory $141,000; credit Accounts Payable $141,000.
D.Debit Finished Goods Inventory $22,000; credit Raw Materials Inventory $22,000.
E.Debit Raw Materials Inventory $153,000; credit Work In Process $153,000.
113.Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the direct labor for the month is:
A.Debit Payroll Expense $212,000; credit Cash $212,000.
B.Debit Factory Wages Payable $285,000; credit Work in Process Inventory $212,000.
C.Debit Work in Process Inventory $212,000; credit Cash $285,000.
D.Debit Factory Wages $285,000; credit Factory Wages Payable $285,000.
E.Debit Work in Process Inventory $212,000; credit Factory Wages Payable $212,000.
114.Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the $73,000 indirect labor for the month is:
A.Debit Supervisor Wage Expense; credit Factory Wages Payable.
B.Debit Factory Overhead; credit Factory Wages Payable.
C.Debit Supervisor Wage Expense; credit Factory Overhead.
D.Debit Factory Wages Payable; credit Factory Overhead.
E.Debit Factory Wage Expense; credit Cash.
115.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record the purchase of materials is:
A.Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000.
B.Debit Work in Process Inventory $198,000; credit Accounts Payable $198,000.
C.Debit Raw Materials Inventory $198,000; credit Work in Process Inventory $198,000.
D.Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000.
E.Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000.
116.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record the issuance of materials to production is:
A.Debit Raw Materials Inventory $195,000; credit Accounts Payable $195,000.
B.Debit Work in Process Inventory $195,000; credit Raw Materials Inventory $195,000.
C.Debit Raw Materials Inventory $195,000; credit Work in Process Inventory $195,000.
D.Debit Work in Process Inventory $165,000; debit Factory Overhead $30,000; credit Raw Materials Inventory $195,000.
E.Debit Finished Goods Inventory $195,000; credit Raw Materials Inventory $195,000.
117.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record payment of the factory payroll is:
A.Debit Work in Process Inventory $150,000; credit Factory Wages Payable $150,000.
B.Debit Work in Process Inventory $150,000; credit Cash $150,000.
C.Debit Factory Wages Payable $150,000; credit Cash $150,000.
D.Debit Work in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Wages Payable $150,000.
E.Debit Work in Process Inventory $110,000; debit Factory Overhead $40,000; credit Cash $150,000.
118.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record the allocation of the factory payroll to production is:
A.Debit Work in Process Inventory $150,000; credit Factory Wages Payable $150,000.
B.Debit Work in Process Inventory $150,000; credit Cash $150,000.
C.Debit Factory Wages Payable $150,000; credit Cash $150,000.
D.Debit Work in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Wages Payable $150,000.
E.Debit Work in Process Inventory $110,000; debit Factory Overhead $40,000; credit Cash $150,000.
119.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record the application of factory overhead to production is:
A.Debit Work in Process Inventory $225,000; credit Factory Overhead $225,000.
B.Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000.
C.Debit Factory Payroll $150,000; credit Work in Process Inventory $150,000.
D.Debit Factory Overhead $165,000; credit Work in Process Inventory $165,000.
E.Debit Work in Process Inventory $165,000; credit Factory Payroll $165,000.
120.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The total manufacturing costs added during the period are:
A.$440,000.
B.$470,000.
C.$500,000.
D.$570,000.
E.$540,000.
121.Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $167,800 during the month, compute the amount of under- or overapplied overhead:
A.$2,800 overapplied.
B.$17,800 underapplied.
C.$2,800 underapplied.
D.$17,800 overapplied.
E.$57,200 overapplied.
The Correct Answer and Explanation is :
Here are the correct answers and explanations for each question:
112.
Answer: B
Debit Work in Process Inventory $141,000; credit Raw Materials Inventory $141,000.
Explanation: Direct materials used in production are transferred from the raw materials inventory to the work in process inventory. The debit goes to work in process, which represents the materials being used in production. The credit reduces the raw materials inventory.
113.
Answer: E
Debit Work in Process Inventory $212,000; credit Factory Wages Payable $212,000.
Explanation: Direct labor costs are charged to work in process inventory. The wages payable are credited as the labor costs have been incurred but not yet paid.
114.
Answer: B
Debit Factory Overhead; credit Factory Wages Payable.
Explanation: Indirect labor costs (supervisory costs) are treated as part of factory overhead, so they are charged to the factory overhead account.
115.
Answer: A
Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000.
Explanation: The purchase of raw materials is recorded by debiting raw materials inventory and crediting accounts payable since the materials were purchased on credit.
116.
Answer: D
Debit Work in Process Inventory $165,000; debit Factory Overhead $30,000; credit Raw Materials Inventory $195,000.
Explanation: The $195,000 worth of materials issued to production includes both direct and indirect materials. Direct materials go to work in process, and indirect materials are recorded as part of factory overhead.
117.
Answer: C
Debit Factory Wages Payable $150,000; credit Cash $150,000.
Explanation: The total factory payroll is paid in cash. Therefore, factory wages payable is debited (representing the obligation), and cash is credited.
118.
Answer: D
Debit Work in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Wages Payable $150,000.
Explanation: The direct labor ($110,000) is charged to work in process, while indirect labor ($40,000) is charged to factory overhead.
119.
Answer: B
Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000.
Explanation: Factory overhead is applied to work in process based on the predetermined rate, which in this case is 150% of direct labor cost. The $165,000 reflects this overhead allocation.
120.
Answer: B
$470,000.
Explanation: Total manufacturing costs include direct materials, direct labor, and applied factory overhead. The materials used ($195,000), direct labor ($110,000), and applied overhead ($165,000) sum up to $470,000.
121.
Answer: A
$2,800 overapplied.
Explanation: The applied overhead is based on direct labor cost, and the predetermined rate is 150%. The applied overhead is $165,000. The actual overhead costs incurred were $167,800, so the overhead is overapplied by $2,800 ($165,000 – $167,800 = -$2,800). Therefore, $2,800 is overapplied.
In job order costing, companies track direct materials, direct labor, and factory overhead separately. The direct materials and direct labor are charged to work in process, while indirect materials and labor are charged to factory overhead. The overhead rate is based on direct labor cost, and the applied overhead is compared with the actual overhead incurred to determine if overhead is overapplied or underapplied.