Question 1. The following data pertain to Harriman Company's operations during July:
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July 1
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July 31
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Raw materials inventory
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$0
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$3,900
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Work in process inventory
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?
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$2,300
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Finished goods inventory
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$13,400
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?
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Other data:
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Cost of goods manufactured
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$106,000
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Raw materials used
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$41,300
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Manufacturing overhead costs
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$21,800
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Direct labor costs
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$39,400
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Gross profit
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$100,700
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Sales
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$210,800
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The ending finished goods inventory was:
a.$13,400
b.$15,700
c.$9,300
d. $19,500
Question 2. Geneva Steel Corporation produces large sheets of heavy gauge steel. The company showed the following amounts relating to its production for the year just completed:
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Direct materials used in production
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$111,900
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Direct labor costs for the year
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$54,100
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Work in process, beginning
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$22,400
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Finished goods, beginning
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$46,700
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Cost of goods available for sale
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$288,400
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Cost of goods sold
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$239,300
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Work in process, ending
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$15,700
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Cost of goods manufactured for the year was:
$158,700
$169,700
$241,700
$246,000
3. Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 68% of direct labor cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
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Raw materials (all direct materials):
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Purchased during the month
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$10,000
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Used in production
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$21,000
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Labor:
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Direct labor hours worked during the month
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1,600
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Direct labor cost incurred
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$26,100
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Indirect labor cost incurred
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$7,500
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Manufacturing overhead costs incurred (total)
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$19,800
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Inventories:
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Raw materials (all direct) August 31
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$8,800
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Work in process, August 1
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$8,800
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Work in process, August 31*
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$13,800
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*contains $4,600 of direct labor cost
The entry to dispose of the underapplied or overapplied overhead cost for the month would include:
a. a credit of $2,052 to the Manufacturing Overhead Account.
b. a debit of $7,500 to Cost of Goods Sold.
c. a credit of $2,052 to Cost of Goods Sold.
d. a credit of $4,600 to Manufacturing Overhead.