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Question
Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:
| Direct materials used | $87,000 |
| Direct labor used | 160,000 |
| Predetermined overhead rate (based on direct labor) | 155% |
| Goods transferred to finished goods | 432,000 |
| Cost of goods sold | 444,000 |
| Credit sales | 810,000 |
A. Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000.
B. Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000.
C. Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000.
D. Debit Goods in Process Inventory $87,000; credit Raw Materials Inventory $87,000.
E. Debit Goods in Process Inventory $87,000; credit Cost of Goods Sold $87,000.
Answer
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Related questions
Q:
Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.
Q:
A fixed budget performance report never provides useful information for evaluating variances.
Q:
A variable or flexible budget is so named because it only focuses on variable costs.
Q:
Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
a. Beginning cash balance on June 1 is $52,000.
b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000.
d. Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30.
e. Budgeted depreciation expense for June: $24,000.
f. Other cash expenses budgeted for June: $282,000.
g. Accrued income taxes due in June: $48,000.
h. Bank loan interest due in June: $8,000 which represents the 1% monthly expense on a bank loan of $800,000.
i. Loan payment of $50,000 if the preliminary cash balance is greater than $100,000.
j. Cost of goods sold is 53% of sales.
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Q:
Use the following information to prepare the June cash budget for Arbor Company. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30.
a. Beginning cash balance on June 1 is $52,000.
b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000.
d. Budgeted cash disbursements for salaries in June: $260,000.
e. Budgeted depreciation expense for June: $24,000.
f. Other cash expenses budgeted for June: $282,000.
g. Accrued income taxes due in June: $48,000.
h. Bank loan interest due in June: $8,000.
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C. $22,000 favorable.
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E. $32,000 favorable.
Q:
When recording the journal entry for labor, the Goods in Process Inventory account is
A. Debited for standard labor cost.
B. Debited for actual labor cost.
C. Credited for standard labor cost.
D. Credited for actual labor cost.
E. Not used.
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$3.10 per unit produced Fixed overhead ($12,000/6,000 estimated units to be produced)
$2 per unit Actual units produced ..
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B. $1,295F.
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E. $3,695U.
Q:
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
47,000 A. $28,000 favorable.
B. $28,000 unfavorable.
C. $45,000 unfavorable.
D. $45,000 favorable.
E. $17,000 unfavorable.
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
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