ABC Company uses a job-order costing system and applies manufacturing overheadbased on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be$150,000, and the estimated machine hours are 25,000. The following information isfor the last month in 2020:Job 11Job 12Job 13TotalsWork in process, beginning$10,000$3,000$2,000$15,000Direct materials1,0009505002,450Direct labour costs9003001501,350Machine hours25015050450Actual manufacturing overhead costs incurred in the monthno beginning balance in the manufacturing overhead account at the start of the$3,500. There wasmonth.Questionsa)Calculate the pre-determined overhead rate.b)Calculate the total cost for each job.If Job No. 11 was completed during the month, what is the balance of WIP atthe end of the month?d).What is the balance of the manufacturing overhead account at the end of themonth? is manufacturing overhead over or underapplied?e)Prepare the journal entry to close underapplied or overapplied overhead tocost of goods sold.

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Description: ABC Company uses a job-order costing system and applies manufacturing overheadbased on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be$150,000, and the estimated machine hours are 25,000. The following information isfor the l

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ABC Company uses a job-order costing system and applies manufacturing overhead based on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be $150,000, and the estimated machine hours are 25,000. The following information is for the last month in 2020: 1111 Job 12 $3,000 Job 11 Job 13 Totals $15,000 2,450 $2,000 Work in process, beginning Direct materials $10,000 1,000 950 500 150 1,350 Direct labour costs Machine hours 900 300 250 150 50 450 Actual manufacturing overhead costs incurred in the month were $3,500. There was no beginning balance in the manufacturing overhead account at the start of the month. Questions a). Calculate the pre-determined overhead rate. b) Calculate the total cost for each job. If Job No. 11 was completed during the month, what is the balance of WIP at the end of the month? What is the balance of the manufacturing overhead account at the end of the month? Is manufacturing overhead over or underapplied? e). Prepare the journal entry to close underapplied or overapplied overhead to cost of goods sold.

ABC Company uses a job-order costing system and applies manufacturing overhead based on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be $150,000, and the estimated machine hours are 25,000. The following information is for the last month in 2020: 1111 Job 12 $3,000 Job 11 Job 13 Totals $15,000 2,450 $2,000 Work in process, beginning Direct materials $10,000 1,000 950 500 150 1,350 Direct labour costs Machine hours 900 300 250 150 50 450 Actual manufacturing overhead costs incurred in the month were $3,500. There was no beginning balance in the manufacturing overhead account at the start of the month. Questions a). Calculate the pre-determined overhead rate. b) Calculate the total cost for each job. If Job No. 11 was completed during the month, what is the balance of WIP at the end of the month? What is the balance of the manufacturing overhead account at the end of the month? Is manufacturing overhead over or underapplied? e). Prepare the journal entry to close underapplied or overapplied overhead to cost of goods sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

ABC Company uses a job-order costing system and applies manufacturing overhead
based on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be
$150,000, and the estimated machine hours are 25,000. The following information is
for the last month in 2020:
Job 11
Job 12
Job 13
Totals
Work in process, beginning
$10,000
$3,000
$2,000
$15,000
Direct materials
1,000
950
500
2,450
Direct labour costs
900
300
150
1,350
Machine hours
250
150
50
450
Actual manufacturing overhead costs incurred in the month
no beginning balance in the manufacturing overhead account at the start of the
$3,500. There was
month.
Questions
a)
Calculate the pre-determined overhead rate.
b)
Calculate the total cost for each job.
If Job No. 11 was completed during the month, what is the balance of WIP at
the end of the month?
d).
What is the balance of the manufacturing overhead account at the end of the
month? is manufacturing overhead over or underapplied?
e)
Prepare the journal entry to close underapplied or overapplied overhead to
cost of goods sold.

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