Lock Co Applies Factory Overhead to Production on the Basis of of Direct

question 65

Essay

Lock Co. applies factory overhead to production on the basis of direct labor costs. Assume that at the beginning of the current year the company estimated that direct material costs would be $178,800, direct labor costs would be $154,000, and factory overhead costs would be $231,000.
(1) If the $28,000 cost of Lock's Work in Process Inventory included $5,200 of direct labor cost, what amount of direct materials cost was included?
(2) If instead $8,100 of the company's $34,300 Finished Goods Inventory was direct materials cost, determine the direct labor cost and factory overhead cost of the finished goods inventory.

Understand the categorization of cash receipts and payments into operating, investing, and financing activities.

Recognize the criteria for an item to be classified as a cash equivalent.

Familiarize with the purpose and importance of preparing a statement of cash flows.

Learn how transactions impact the cash and cash equivalents' ending balance.

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Definitions:

Main Effect

The overall impact of an independent variable on a dependent variable in an analysis, ignoring the effects of other independent variables.

F Tests

A class of statistical tests used to compare the variances of two or more samples to assess the equality of population variances.

Two-way ANOVA

A statistical test used to determine the effect of two nominal predictor variables on a continuous outcome variable, allowing for interactions between the factors to be analyzed.

Interaction Effect

The impact that the combination of variables has on a dependent variable, which is different from the effect of any single variable.