34. A company manufactures picture frames. All of the following are PRODUCT cost

Question

34. A company manufactures picture frames. All of the following are PRODUCT costs EXCEPT: a. Wages paid for assembly workers b. Salary of president of the company c. Wood for frames d. Depreciation on factory building 35. Which of the following statements is FALSE? a. Indirect Labor is a type of Manufacturing Overhead b. Product costs are not immediately expensed, instead they are "absorbed by each unit of inventory asit moves through production. c. The three categories of Manufacturing Overhead are indirect labor, indirect materials, and all other production-related costs. d. Period costs are expensed immediately as COGS 36. Giltronics, Inc. applies materials handling manufacturing overhead on the basis of the number of moves required. The following information is available at the beginning of the year: Estimated Overhead $87,400 and estimated number of moves 2300. At the end of the accounting period, actual Overhead was $87,043 and actual number of moves was 2123. The predetermined overhead rate per move is: a. $37 b. $38 c. $41 d. $42 37. Refer to the information in the question above. The amount of manufacturing overtead applied to Work-in- Process Inventory is a. $94,300 b. $87,400 c. $87,043 d. $80,674 38. Refer to the information in the question above. The amount of over/under-applied overhead is: a. $6,726 underapplied b. $6,369 underapplied $6,900 overapplied c. d. $6,369 overapplied 39. A company uses the perpetual inventory method. It sell Inventory with a cost of $500 for $625 a. Dr Cash $625, Cr Sales Revenue $500, Cr. Inventory $125 b. Dr Cash $625, Cr Sales Revenue $625, Dr COGS $500, Cr Inventory $500 c. Dr. Cash $500, Cr Inventory $500 d. Dr. Cash $625, Cr. Inventory $500, Cr. Sales Revenue $125 the following is the correct journal entry to record this transaction? 40. The journal entry to record a customer's payment within the discount period would include all of the foll EXCEPT: a. Debit to Cash b. Debit to Sales Discount c. Credit to Sales Revenue d. Credit to Accounts Receivable

Explanation / Answer

Note: As per rule I can answer 4 parts of the question. Although I am answering first 5 parts because 3 parts are continuous parts of a numerical question.

(34).

Answer is option (b). Salary of president of the company

Explanation;

Product cost is comprised of direct materials, direct labor and factory overheads. So salary of president of the company is not part of direct materials, direct labor and factory overheads etc. that is why salary of president of the company is not part of product cost.

(35).

Answer is option (d). Period costs are expensed immediately as COGS.

Explanation;

As we know that period costs are not part of COGS because all types of product costs are part of COGS. Hence this statement is false.

(36).

Answer is option (b). $38

Explanation;

Following is the formula of calculating predetermined overhead rate;

(Estimated overhead / Estimated number of moves)

Hence, predetermined overhead rate ($87400 / 2300) = $38

(37).

Answer is option (d). $80674

Explanation;

Formula is as follow;

predetermined overhead rate * Actual moves

Manufacturing overhead applied = ($38 * 2123) = $80674

(38).

Answer is option (b). $6369 underapplied

Explanation;

Formula is as follow;

Manufacturing overhead applied - Actual manufactruing overhead

$80674 – $$87043 = $6369 underapplied

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