Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the work-in-process inventory consists of 180,000 units that are 30% complete with respect to conversion. Beginning inventory had $420,000 of direct materials and $139,000 of conversion cost. The direct material cost added in November is $2,220,000, and the conversion cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 60,000 were from beginning work in process and 640,000 units were started and completed during the period. Show Required 1. Determine the equivalent units of production with respect to (a) direct materials and (b) conversion. 2. Compute both the direct material cost and the conversion cost per equivalent unit. 3. Compute the direct material cost and the conversion cost assigned to (a) units completed and transferred out and (b) ending work in process inventory. Analysis Component 4. The company sells and ships all units to customers as soon as they are completed. Assume that an error is made in determining the percentage of completion for units in ending inventory. Instead of being 30% complete with respect to labor, they are actually 60% complete. Write a one-page memo to the plant manager describing how this error affects its November financial statements. Test Bank for Accounting, Tools for Business Decision Making Fifth Edition129.If the manufacturing overhead costs applied to jobs worked on were greater than theactual manufacturing costs incurred during a period, overhead is said to beBusiness Economics Get answer to your question and much more 130.At the end of the year, any balance in the Manufacturing Overhead account is generallyeliminated by adjustingBusiness Economics Get answer to your question and much more 131.If Manufacturing Overhead has a credit balance at the end of the period, thenBusiness Economics Get answer to your question and much more 132.The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000and one credit for $86,000. Based on this information, manufacturing overheada.has been overapplied.b.has been underapplied.c.has not been applied.d.shows a zero balance.Ans: A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA133.If Manufacturing Overhead has a debit balance at the end of the period, then Get answer to your question and much more 27.If the Manufacturing Overhead account has a debit balance at the end of a period, itmeans thatA)actual overhead costs were less than overhead costs applied to jobs.B)actual overhead costs were greater than overhead costs applied to jobs.C)actual overhead costs were equal to overhead costs applied to jobs.D)no jobs have been completed. 28.At the end of the year, any balance in the Manufacturing Overhead account is generallyeliminated by adjusting Get answer to your question and much more 29.The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000and one credit for $86,000. Based on this information, manufacturing overhead Get answer to your question and much more 30.If manufacturing overhead has been underapplied during the year, the adjusting entry atthe end of the year will show a Get answer to your question and much more What does a debit balance in the manufacturing overhead account at the end of the period tell management?A debit balance in manufacturing overhead shows either that not enough overhead was applied to the individual jobs or overhead was underapplied. If, at the end of the term, there is a credit balance in manufacturing overhead, more overhead was applied to jobs than was actually incurred.
What does it mean to debit manufacturing overhead?The balance in the manufacturing overhead account may be a debit or credit, depending on whether: o Debit if the overhead applied is less than the actual overhead costs incurred (underapplied). Underapplied overhead represents an expense that must be closed or transferred to cost of goods sold.
What do you debit when you credit manufacturing overhead?First, the manufacturing overhead account tracks actual overhead costs incurred. Recall that manufacturing overhead costs include all production costs other than direct labor and direct materials. The actual manufacturing overhead costs incurred in a period are recorded as debits in the manufacturing overhead account.
What accounts go into manufacturing overhead?To calculate manufacturing overhead, you need to add all the indirect factory-related expenses incurred in manufacturing a product. This includes the costs of indirect materials, indirect labor, machine repairs, depreciation, factory supplies, insurance, electricity and more.
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If the manufacturing overhead account has a debit balance at the end of a period, it means that
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