Answer:
C. 95380 equivalent units
Explanation:
Equivalent units is the term used for proportionately equally completed units. This is basically used for allocation of overheads.
Here, actually completed that is 100% complete units = 85,500 units
Further units under work in process = 49,400
Which are 20% complete.
This means that incomplete 49,400 units = 49,400 20% = 9,880 units 100% complete
Thus, total equivalent units = 85,500 + 9,880 = 95,380 units.
Answer: Option C - Assets are Overstated; No effects on liabilities: Equity is Overstated
Explanation:
When Bad debts are recorded, they will reduce the Accounts Receivable account because less money will be expected from debtors. Accounts Receivable is an asset account so it will be Overstated if bad debts are not recorded.
Equity will also be overstated because bad debts is an expense that is sent to the Income statement. If this expense is not deducted, the net income will be larger than it should be and when added to Equity it will overstate it.
Answer:
Balance for the Factory Overhead account: 19,000 credit
Explanation:
We will first, calculate the overhead rate based on the predetermination overhead rate:
The total manufacturing cost will be distributed over the cost driver. In this case, labor cost:
360,000/180,000 = 2 overhead rate
Then, we calculate the applied overhead 203,000 x 2 = 406,000
Now, the balance for factory overhead account:
Actual overhead: 387,000 debit
payable, accumulated depreicaiton and other 387,000 credit
WIP 406,000 debit
Applied Overhead 406,000 credit
Balance:
406,000 - 387,000 = 19,000 credit