Inventories. Raw material 61,000 81,000 Work in process 80,000 30,000 Finished goods 90, ,000

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1 Beginning Inventories Ending Raw material 61,000 81,000 Work in process 80,000 30,000 Finished goods 90, ,000 Direct material used 318,000 Direct Labour 230,000 Manufecturing Overhead-60% of Direct Labor Total manufacturing costs 686,000 Cost of goods available for sale 826,000 Selling and administrative expenses 30,500 Q1- Raw material purchased Direct material used 318,000 Add Raw material ending 399,000 Deduct raw material beginning 338,000 This is raw material purchased d

2 during year

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4 Aquarius Hotel Supply Company Budgeted sales revenue 205,000 Budgeted manufacturing overhead 364,000 Budgeted machine hours (based on practical capacity) 10,000 Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate per hour 14 Actual manufacturing overhead Actual machine hours Actual direct-labor hours Actual direct-labor rate per hour 16 Predetermined Overhead Rate 36.4 Actual Overhead Rate Applied Manufecturing Overhead

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7 Beginning Inventories Ending Work in process 94, Direct material used Direct Labour Manufecturing Overhead-20 percent of total manufacturing costs Total manufacturing costs Cost of goods manufactured 1,338,500 Cherry Hill Glass Company employs a normal costing system Total manufacturing costs were $1,310,000. Cost of goods manufactured was $1,275,500. Applied manufacturing overhead was 30 percent of total manufacturing costs. Manufacturing overhead was applied to production at a rate of 80 percent of directlabor cost. Work-in-process inventory on January 1 was 75 percent of work-in-process inventory on December 31.

8 TMC 1,370,000 Add WIP B 1,464,500 Deduct WIP E 1,338, , ,500 Value of X 7, ,370,000

9 Paramus Metal Works for the year just ended Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Budgted labor hours Budgted labor Rate Actual direct-labor cost: 80,000 hours at $17.50 per hour Actual labor hours Actual labor Rate Budgeted manufacturing overhead: Predetermined Overhead Rate Budgeted selling and administrative expenses: Actual manufacturing overhead: Depreciation Property taxes Indirect labor Supervisory salaries Utilities Insurance Rental of space Indirect material (see data below) Indirect material: Beginning inventory, January 1 Purchases during the year Ending inventory, December 31 Actual Overhead rate Overhead as per bidgted rate Overhead as per actual rate close out the Manufacturing Overhead account into Cost of Goods Sold

10 ,000 93, No explanation

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13 Rexford Company Beginning Inventories Ending Raw material 134, ,000 Work in process 237, ,000 Finished goods 125, ,000 Direct material purchaed 191,000 Raw Material Used 201,000 Direct Labour 350,000 Predetermined Manufecturing Overhead-60% of Direct Labor Actual manufacturing overhead 175,000 Overapplied overhead 35,000 Overhead applied to work in process 210,000 Total manufecturing costs 761,000 Add Work In process beginning 998,000 Deduct work in process at end 747,000 Cost of good manufectured 747,000 Add- Finished goods inventory beginning 872,000 Cost of goods available for Sale 872,000 deduct- Finished goods inventory end 755,000 Cost of good sold 755,000 Dedct overapplied overhead 720,000 Cost of good sold (adjusted for overapplied overhead) 720,000 Actual Selling and administrative expenses 120,000

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16 Rexford Company Beginning Inventories Ending Raw material 227,000 54,000 Work in process 16, ,000 Finished goods 28,000 17,000 Direct material purchaed 0 Direct Material Used 173,000 Direct Labour 320,000 Overhead applied to work in process 160,000 Total manufecturing costs 653,000 Add Work In process beginning 669,000 Deduct work in process at end 121,000 Cost of good manufectured 121,000 Add- Finished goods inventory beginning 149,000 Cost of goods available for Sale 149,000 deduct- Finished goods inventory end 132,000 Cost of good sold 132,000 Sales revenue Gross Margin 63,000

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20 Aquarius Hotel Supply Company Budgeted sales revenue 205,000 Budgeted manufacturing overhead 364,000 Budgeted machine hours (based on practical capacity) 8,000 Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate per hour 13 Actual manufacturing overhead 338,000 Actual machine hours 11,000 Actual direct-labor hours 18,000 Actual direct-labor rate per hour 16 Budgted Ovehead rate-machine Hours 45.5 Busgted Overhead- Labor Hours 18.2 Busgted Overhead- Labor Dollars 1.4 Overapplied Machine Hours 162,500 Underapplied Labour Hours 10,400 Overapplied Labor Rate 65200

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1. F; I 2. V ; D 3. V ; D 4. F; I 5. F; I 6. F; I 7. V ; D 8. F; I 9. F; I 10. V ; D 11. F; I 12. F; I 13. F; I 14. F; I

1. F; I 2. V ; D 3. V ; D 4. F; I 5. F; I 6. F; I 7. V ; D 8. F; I 9. F; I 10. V ; D 11. F; I 12. F; I 13. F; I 14. F; I SOLUTIONS TO EERCISES EERCISE 2-1 (15 minutes) 1. F; I 2. V ; D 3. V ; D 4. F; I 5. F; I 6. F; I 7. V ; D 8. F; I 9. F; I 10. V ; D 11. F; I 12. F; I 13. F; I 14. F; I EERCISE 2-2 (15 minutes) 1. Product

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