Heiny Inc Uses a Job-Order Costing System in Which Any Underapplied

question 95

Multiple Choice

Heiny Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In March, the company completed job G59N that consisted of 21,000 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job G59N shows that the job's total cost was $940,800. During the month, the actual manufacturing overhead cost incurred was $269,640 and the manufacturing overhead cost applied was $249,900. And during the month, 6,000 completed units from job G59N were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for March is closest to:

• A)$871,500
• B)$274,440
• C)$940,800
• D)$268,800

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Definitions:

Actual Reserves

Actual reserves refer to the total amount of funds that a bank has on deposit at the Federal Reserve bank of its district, plus its vault cash, constituting its total legal reserves.

Fiscal Policy

Governmental policies regarding taxation and spending to influence the economy.

Negative Excess Reserves

A situation where a bank has less reserves than the minimum required reserve, indicating a potential liquidity problem.

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by central banking authorities, to ensure bank liquidity.