ACC 202 – Chapters 15, 16, & 17 Review

Chapter 15
BE 153
Lando Company reported the following amounts for 2018:
Raw materials purchased $83,000 Ending work in process inventory $ 6,300
Beginning raw materials inventory 5,200 Manufacturing overhead costs applied 36,000
Ending raw materials inventory 4,500 Beginning work in process inventory 6,100

Instructions
Calculate the cost of materials used in production

Ex. 169
Fort Corporation had the following transactions during its first month of operations:
1. Purchased raw materials on account, $85,000.
2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials
requisition slips indicated that $6,000 was classified as indirect materials.
3. Factory labor costs incurred were $175,000 of which $145,000 pertained to factory wages
payable and $30,000 pertained to employer payroll taxes payable.
4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor.
5. Overhead costs incurred on account were $198,000.
6. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were
completed and transferred to finished goods.
8. Finished goods costing $100,000 to manufacture were sold on account for $130,000.

Instructions
Journalize the above transactions for Fort Corporation.
Chapter 16
BE 153
Sequal Company has the following production data for June: units transferred out 50,000, and
ending work in process 6,000 units that are 100% complete for materials and 30% complete for
conversion costs. Unit materials cost is $5 and unit conversion cost is $7.

Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in
process.

Ex. 162
Benson Industries uses a process cost system. Products are processed first by Department A,
second by Department B, and then they are transferred to the finished goods warehouse. Shown
below is the cost information for Department B during the month of October:

Costs of units transferred in $120,000

Manufacturing costs added in Department B:
Direct materials $50,000
Direct labor 12,000
Manufacturing overhead 19,000 81,000
Total costs charged to Department B in October $201,000
The cost of work in process in Department B at October 1 is $25,000, and the cost of work in
process at October 31 has been determined to be $30,000.
Instructions
Prepare journal entries to record for the month of October:
(a) The transfer of production from Department A to B.
(b) The manufacturing costs incurred by Department B.
(c) The transfer of completed units from Department B to the finished goods warehouse.

Chapter 17
Ex. 174
Horton, Reiser, and Associates, a law firm, employs ABC. The following budgeted data for each
of the activity cost pools is provided for the year 2018

Estimated Expected Use of

Activity Cost Pools Overhead Cost Drivers per Activity
Researching legal issues $ 31,500 900 research hours
Preparing legal documents 480,000 30,000 pages
Meeting with clients 1,760,000 8,800 professional hours

During 2018 the firm worked 660 research hours, 10,000 professional hours, and prepared 25,000
document pages.

Instructions
Compute the total overhead applied during 2018.