ACC 212 Exam 1 Study Guide

ELI ACC 212 Exam 1 Study Guide (Chapters 14 thru 16) Exam 1 (150 points) covers Chapters 14 through 16 and will have 16 multiple-choice questions and 3 essay questions or problems. Make up your own study guide from the tips provided. Students must earn 60% (90 points) or more on two of the first three Exams (Exams 1, 2 or 3) to pass this course. Be serious about your preparation. ESSAY/PROBLEM QUESTIONS: It is important that you do well on the essay/problem questions. Each essay question/problem is worth 30 points. There is one problem from each chapter. Essay/Problem 1- Manufacturing statement preparation Direct materials Raw materials inventory, Dec. 31, 2012 $ 8,000 Raw materials purchases 86,500 Raw materials available for use 94,500 Less raw materials inventory, Dec. 31, 2013 9,000 Direct materials used $85,500 Direct labor 60,000 Factory overhead Indirect labor $ 9,000 Factory supervision 6,000 Factory utilities 2,600 Repairs – factory equipment 2,500 Property taxes – factory building 1,900 Factory supplies used 600 Factory insurance expired 1,100 Depreciation expense – small tools 200 Depreciation expense – factory equipment 3,500 Depreciation expense – factory building 1,800 Depreciation expense – patents 800 Total factor overhead 30,000 Total manufacturing costs $175,500 Add goods in process inventory, Dec. 31, 2012 2,500 Total cost of goods in process $178,000 Less goods in process inventory, Dec. 31, 2013 7,500 Cost of goods manufactured $170,500 This study source was downloaded by from CourseH on :59:43 GMT -06:00 Essay/Problem 2-Factory overhead computed, applied and adjusted FOH includes all production costs other than direct materials and direct labor, such as indirect materials and indirect labor and others. Debit FOH and credit other accounts such as Cash, Accounts Payable, and Accumulated Depreciation – Equipment. Given the difficulty in determining the OH amount for a specific job, we allocate overhead to individual jobs in some reasonable manner; generally, by linking to another factor used in production, such as direct labor or machine hours. Allocation base – the factor to which OH costs are linked. Predetermined OH rate = Estimated OH costs / Estimated activity base If total OH costs of $200,000 and estimated direct labor costs of $100,000, then Predetermined OH rate is 200% (200,000 / 100,000). If we see that 1,000 of DL went into Job B-15, then the OH will be 2,000 (200% of 1,000) Mar. 11 Goods in process inventory – Job B15 1,600 Factory overhead 1,600 To assign overhead to job B-15 Overhead Costs Factory Overhead Balance Is Overhead is… Journal Entry Required Actual Applied Debit Underapplied COGS $XXX FOH $XXX Applied Actual Credit Overapplied FOH $XXX COGS $XXX Mar. 31 Cost of Goods S