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Accounting 217 practice chapter 3

by: Hannah Hicks

Accounting 217 practice chapter 3 ACC 216

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Hannah Hicks

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chapter 3 review questions
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This 3 page Study Guide was uploaded by Hannah Hicks on Monday October 5, 2015. The Study Guide belongs to ACC 216 at a university taught by in Summer 2015. Since its upload, it has received 36 views.

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Date Created: 10/05/15
Hannah Hicks ACC 217 Test 10/5/15 3-1) Overhead cost cannot be traced to jobs or products and must be allocated rather then traced if they are assigned to products. 3-2) 1. Estimate the total amount of allocation base. 2. Estimate the total fixed manufacturing overhead cost 3. Estimate total manufacturing overhead cost. 4. Compute the predetermined overhead rate 3-3) The purpose of a job cost sheet is to keep track of all manufacturing cost relating to the job. 3-4) Production cost are not traced to a specific job or product and if they are, then they are allocated to the products. 3-5) Actual rate computed seasonally in overhead cost or product base. This can produce fluctuations in the overhead rate with the actual manufacturing overhead costs companies must wait until the end. 3-6) The base predetermines the over head rate and drives the cost. 3-7) There could be a loss of profit by an unexpected lawsuit or accident that is not covered by insurance. 3-8) The manufacturing overhead account has a credit when overhead cost is applied to work in progress. The total amount of overhead applied will not be the same as the amount of actual cost. 3-9) Under applied overhead is less than actual overapplied overhead when applied. Under applied increases cost of goods sold and overhead decreases cost of goods sold. 3-10) Poor control over spending that ends in actual overhead costs exceeding the limit. 3-11) Underapplied overhead is added to cost of goods sold because this concept implies that not enough overhead was assigned to jobs during the period. Overapplied overhead is added on the other hand will be deducated from cost of goods sold. 3-12) A plantwide overhead rate is a single overhead that companies use to allocate all of the manufacturing overhead costs to products or cost objects. Multiple overhead rates are used in some companies to more effectively allocate the overhead costs among products. 3-13) It causes the overhead to increase and direct labor to decrease. If predetermined overhead is based on direct labor, it results in an increase in predetermined overhead rates. 3-3) 1. 464 2. $11.60 3-4) a. raw materials $80,000 debit accounts payable $80,000 credit b. work in progress $62,000 debit man overhead $9,000 debit raw materials $71,000 credit c. work in process $101,000 debit Hannah Hicks ACC 217 Test 10/5/15 man overhead $11,000 debit wages payable $112,000 credit d. man overhead $175,000 debit various accounts $175,000 credit 3-5) credit debit a) Cash Raw materials $94,000 Work in progress $112,000 Man overhead $20,000 Man overhead $143,000 $369,000 b) Work in progress Raw materials $78,000 Cash $112,000 Man overhead $152,000 $342,000 c) Man overhead Raw materials $11,000 Cash $163,000 $174,000 d) Cash $94,000 Work in progress $78,000 Man overhead $11,000 $89,000 e) Cost of goods sold $342,000 $342,000 f) Finished goods $342,000 Man overhead $22,000 $364,000 $364,000 Hannah Hicks ACC 217 Test 10/5/15 Cost of goods sold = $364,000 3-6) Raw materials $12,000 + purchase of raw materials $30,000 total $42,000 -raw mat. $42,000 raw mat. Used in production $24,000 -indirect materials $5,000 total $19,000 part 2 finished goods $35,000 +COG manufactured $155,000 goods available of sale $190,000 - Finished goods inventory $42,000 Unadjusted cost of goods sold $148,000 + under applied overhead $4,000 adjusted cost of goods sold $152,000 3-7) 1.Man overhead = $209,300 2. overhead will decrease gross profit 3-8) Manufacturing cost = $37,000 Unit product cost = $37


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