Clicker Question Preparation Guide: Ch. 2 Clicker questions will be asked in class based on your completion of this preparation guide. Example in class question: What is the answer to Question 3) b.? You will not have time to complete this guide in class! 1. A selected list of accounts used by Firenze Flooring follows: Cash Accounts or Wages Payable Accounts Receivable Factory Labor Raw Materials Inventory Manufacturing Overhead Work In Process Inventory Cost of Goods Sold Finished Goods Inventory Sales Revenue Firenze Flooring uses a job order system and maintains perpetual inventory records. Instructions: Place the appropriate account in the columns indicating the appropriate account(s) to be debited and credited for the transactions listed below. Transaction Account(s) Debited Account(s) Credited a) Raw materials were purchased on account. b) Factory labor was incurred and is due to employees. c) Direct materials were issued to Work in Process. d) Paid for raw materials purchased previously on account. e) Raw materials were issued to the production facility to be used indirectly during the production process. f) Recognized direct labor and supervisor salaries used. g) Overhead cost was applied to production based on a predetermined overhead rate of $8 per labor hour. h) Production that was completed and transferred to Finished Goods. i) Goods with a production cost of $80,000 were sold for $105,000 on account. (Hint: There will be two accounts debited and two accounts credited).2. During the first year of operations, Moss Manufacturing accumulated the following manufacturing costs: Raw materials purchased on account $16,500 Factory labor accrued $7,200 Incurred manufacturing overhead on account $4,400 a. Prepare separate journal entries for each manufacturing cost. Raw Materials Purchased on Account: Account Titles Debit Credit Factory Labor Accrued: Account Titles Debit Credit Incurred Manufacturing Overhead on Account: Account Titles Debit Credit b. Moss used $12,400 of direct materials and $3,000 of indirect materials on Job 152. Prepare the journal entry to record the materials used. Account Titles Debit Credit3. Cartwright Company estimates that annual manufacturing overhead costs will be $380,000. Estimated annual operating activity bases are: direct labor cost $175,000, direct labor hours 40,000 and machine hours 80,000. The actual manufacturing overhead cost for the year was $387,500 and the actual direct labor cost for the year was $172,000. Actual direct labor hours totaled 38,500 and machine hours totaled 79,000. Cartwright applies overhead based on direct labor hours. a. Compute the predetermined overhead rate per direct labor hour. b. Determine the amount of manufacturing overhead applied. c. Determine if overhead is over- or under-applied and the amount. d. Assume that Actual Manufacturing Overhead for the year was $300,000 and Applied Manufacturing Overhead was $305,000. Based on these numbers, what is the journal entry to correct the balance in the Manufacturing Overhead account at the end of the
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