26) The following data are available for Starbrite Corporation:

 

Estimated direct labor hours

800

Estimated overhead

$36,000

 

If overhead is applied based on direct labor hours, the predetermined overhead rate is:

A) $45.

B) $450.

C) $222.

D) $2,220.

 

27) The following data are available for Skyway:

 

Estimated machine hours 

45,000 hours

Estimated overhead costs

$90,000

 

If overhead is applied based on machine hours, the predetermined overhead rate is:

A) $2.00.

B) $20.00.

C) $0.50.

D) 200%.

 

28) The entry to record selling a product that cost $14,000 would be a credit to Finished Goods Inventory $14,000, and a debit to Cost of Goods Sold $14,000.

29) Work-in-Process Inventory is debited when goods are transferred to finished goods.

 

30) Raw Material is credited and Work-in-Process is debited when raw material is transferred to production.

 

31) Work-in-Process is credited and Payroll is debited when direct labor is charged to production.

 

32) Finished Goods is debited when products are sold and credited when the products are transferred from Work-in-Process.

 

33) Cost of Goods Sold is debited after items have been sold from the finished goods inventory.

 

34) Overhead may be applied based on direct labor hours or machine hours.

 

35) The Overhead Applied account is used to apply overhead costs to production.

 

 



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