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.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...
icon
Related questions
Topic Video
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.
Transcribed Image Text: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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,