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Question
Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:
A. Debit Factory Overhead Assembly $112,500; debit Factory Overhead Finishing $31,500; credit Goods in Process Inventory $144,000.
B. Debit Factory Overhead $144,000; credit Goods in Process Inventory Assembly $112,500; credit Goods in Process Finishing $31,500.
C. Debit Factory Overhead $144,000; credit Factory Payroll $144,000.
D. Debit Goods in Process Inventory - Assembly $112,500; debit Goods in Process Inventory Finishing $31,500; credit Factory Overhead $144,000.
E. Debit Factory Payroll $144,000; credit Cash $144,000.
Answer
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Related questions
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Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.
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A fixed budget performance report never provides useful information for evaluating variances.
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A variable or flexible budget is so named because it only focuses on variable costs.
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Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
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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.
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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.
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
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