OLUTIONS TO EXERCISES
EXERCISE 3-23 PROCESS
1. Job-order
2. Job-order (contracts or projects)
3. Process
4. Process
5. Job-order
6. Process
7. Job-order (contracts or projects)
8. Process
9. Job-order

EXERCISE 3-24
1. Raw-material inventory, January 1 $174,200 Add: Raw-material purchases 248,300 Raw material available for use $422,500 Deduct: Raw-material inventory, January 31 161,200 Raw material used in January $261,300 Direct labor 390,000 Total prime costs incurred in January $651,300 2. Total prime cost incurred in January $651,300 Applied manufacturing overhead (70%  $390,000) 273,000 Total manufacturing cost for January $924,300

EXERCISE 3-24 (CONTINUED)
3. Total manufacturing cost for January $ 924,300 Add: Work-in-process inventory, January 1 305,500 Subtotal $1,229,800 Deduct: Work-in-process inventory, January 31 326,300

Cost of goods manufactured $ 903,500

4. Finished-goods inventory, January 1 $ 162,500 Add: Cost of goods manufactured 903,500 Cost of goods available for sale $1,066,000 Deduct: Finished-goods inventory, January 31 152,100 Cost of goods sold $ 913,900 Since the company accumulates overapplied or underapplied overhead until the end of the year, no adjustment is made to cost of goods sold until December 31. 5. Applied manufacturing overhead for January $273,000 Actual manufacturing overhead incurred in January 227,500 Overapplied overhead as of January 31 $ 45,500 The balance in the Manufacturing Overhead account on January 31 is a $45,500 credit balance. NOTE: Actual selling and administrative expense, although given in the exercise, is irrelevant to the solution.

EXERCISE 3-26
1. Applied manufacturing overhead = total manufacturing costs 30%

= $1,250,000 30%

= $375,000 Applied manufacturing overhead = direct-labor cost 80%

Direct-labor cost = applied manufacturing overhead 80%

= $375,000 .8

= $468,750

2. Direct-material used = total manufacturing cost – direct labor cost – applied manufacturing overhead