7) Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to work in process inventory is less than the amount actually incurred. 8) Cost of goods sold needs to be...

7) Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to work in process inventory is less than the amount actually incurred.

8) Cost of goods sold needs to be debited at year-end when the manufacturing overhead is overallocated in order to clear the overhead account to zero.

9) During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $506,000 of manufacturing overhead costs.  Overhead costs have been underallocated.

10) On January 1, 2012, Matthew Company's work in process inventory account had a balance of $30,000. During 2012, $58,000 of direct materials was placed into production. Manufacturing wages incurred amounted to $84,000, of which $66,000 were for direct labor. Manufacturing overhead is allocated on the basis of 120% of direct labor cost. Actual manufacturing overhead was $90,000. Jobs costing $220,400 were completed during 2009. What is the December 31, 2012 balance in work in process inventory?

A) $16,800

B) $34,800

C) $6,000

D) $12,800

11) On January 1, 2012, Jackson Company's work in process inventory account had a balance of $65,000. During 2012, materials requisitioned for use in production amounted to $70,000, of which $66,000 represented direct materials. Factory wages for the period were $209,000, of which $186,400 were for direct labor. Manufacturing overhead is allocated on the basis of 60% of direct labor cost. Actual overhead was $116,440. Jobs costing $353,240 were completed during 2012. The December 31, 2012, balance in work in process inventory is:

A) $80,000.

B) $72,800.

C) $107,200.

D) $76,000.

12) Overallocation of manufacturing overhead would require which of the following year-end adjustments?

A) A credit to Finished goods inventory

B) A credit to Manufacturing overhead

C) A debit to Work-in process inventory

D) A credit to Cost of goods sold

13) Underallocation of manufacturing overhead would require which of the following year-end adjustments?

A) A credit to Finished goods inventory

B) A credit to Manufacturing overhead

C) A debit to Work-in process inventory

D) A credit to Cost of goods sold

14) Underallocated manufacturing overhead costs are always the result of which of the following situations?

A) Allocated overhead costs are less than actual overhead costs.

B) Actual overhead costs are less than allocated overhead costs.

C) Actual overhead costs are greater than estimated overhead costs.

D) Estimated overhead costs are greater than actual overhead costs.

15) Lakeside Company estimated manufacturing overhead costs for 2012 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2012 totaled 195,000.  The manufacturing overhead account contains debit entries totaling $391,500.  The manufacturing overhead for 2012 was:

A) $31,500 underallocated.

B) $31,500 overallocated.

C) $18,000 underallocated.

D) $18,000 overallocated.

16) Caltran Company has just completed manufacturing job number 445.  It included $320 of direct materials cost, $1,240 of direct labor cost, and $560 of allocated overhead. Which of the following is the correct journal entry needed to record the completed job?