E3-25A Analyze manufacturing overhead (Learning Objectives 3 & 5)Smith Foundry in Columbus, Ohio, uses a predetermined manufacturing overhead rate toallocate overhead to individual jobs based on the machine hours required. At the begin-ning of the year, the company expected to incur the following:Manufacturing overhead costsDirect labor costMachine hours$ 630,000$1,650,00090,000********e**At the end of the year, the company had actually incurred the following:Direct labor costDepreciation on manufacturing plant and equipmentProperty taxes on plantSales salaries ...$1,230,000$ 480,000$ 19,500$ 26,500Delivery drivers' wagesPlant janitors' wages17,000%248,500Machine hours56,500 hoursRequirements1. Compute Smith's predetermined manufacturing overhead rate.2. How much manufacturing overhead was allocated to jobs during the year?3. How much manufacturing overhead was incurred during the year? Is manufacturingoverhead underallocated or overallocated at the end of the year? By how much?4. Were the jobs overcosted or undercosted? By how much?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $53,000 $36,900 $81,800 Direct Labor Cost $44,600 $40,700 $53,600 Labor Hours 2,920 3,510 4,160 The company applies overhead at a rate of $16.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $392,700. The actual overhead for the month was $147,400, of which $122,000 should be credited to accounts payable and $38,000 should be credited to Accumulated Depreciation.Determine the costs that should be assigned to each of the jobs.
Lifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage hauled to the landfill. At the beginning of the current year, management made the following budget estimates to determine overhead application rates. Annual Estimates Direct labor Manufacturing overhead Direct labor hours Tons of Debris 1 Job no. 652 (8,348 square-feet): Cost of material used on job Direct labor cost Direct labor hours Tons of debris Installation Disposal $750,000 $120,000 $100,000 $36,000 25,000 10,000 300 Job #652 for Bees Grocery measured 8,348 square-feet. The job was started and completed in May. Information pertaining to this project is provided below. Installation Disposal $30,000 $1,000 $7,800 $1,100 250 0 80 7 c. Prepare the journal entries required to record…
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Casey carpet manufacturers carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing.
Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of operation, were as follows: Information State University On-the-Go Home Precious Pre-school Direct Materials Cost (food) $54,100 $35,100 $79,700 Direct Labor Cost $43,600 $41,400 $53,500 Labor Hours 3,210 3,690 4,120 The company applies overhead at a rate of $20.00 per labor hour. It completed all of its jobs in November. Total revenue for the three jobs amounted to $401,200. The allocated overhead for the month was $149,800, of which $129,200 should be credited to accounts payable and $41,700 should be credited to Accumulated Depreciation.
Lifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage hauled to the landfill. At the beginning of the current year, management made the following budget estimates to determine overhead application rates Annual Estimates Manufacturing overhed Drectors Tons of Debris Job #652 for Bees Grocery measured 8,348 square feet. The job was started and completed in May. Information pertaining to this project is provided below 30 no 652.348 squ Cost of Drect box cost Dit hours Tons of debris Installation Disposal $150.000 $20.000 $100.000 $36.000 25.000 10.000 0 use on job Instalation Disposal $30.000 $1.000 $7,800 $100 250 d. Assume that actual overhead costs for the year were $98,000 in the installation Division, and $41,000 in the Disposal Division.…
Problem 18: Predetermined Factory Overhead believes that the company would be better if it will use two factory overhead single factory overhead rate that is based on machine hours. Its manager Davao Corp. uses job order costing system to produce its products. It uses a rates, one based on material costs and the other one is based machine hours. The following data are for year 2020: Materials related Factory overhead Machine related Factory overhead Total Budgeted Factory overhead Costs of materials used on jobs Total Machine hours Data related to three jobs worked on in December follow: Material Costs Direct Labor Costs Machine Hours used Job # 1 168,000 128,000 68,000 Budgeted FOH 3,840,000 10,400,000 14,240,000 Job # 2 656,000 104,000 36,000 Job Order Costing 12,800,000 1,600,000 Job # 3 312,000 144,000 23,200 Actual factory overhead related to materials was P318,400 and actual factory overhead related to machine hours was P846,400. Required: 1. Determine the predetermine factory…
a. REQUIREMENTS #2 and #3 ONLY of Exercise 4-49 (picture 2). Assume Direct Labor workers make $20 per hour, so with the given labor cost per job, you can determine the number of hours worked. CHANGE the Exercise to say that Overhead is applied at the rate of $32 per direct labor hour. ALSO CHANGE to say that Job #39 and Job #40 were completed and sold, while Job #41 and Job #42 are complete but not sold, and Job #43 is not completed yet. b. Use the information in Problem 4-53 (picture 2) to prepare journal entries for the month of July with the following CHANGES. First, assume that the company uses a plantwide overhead rate based on direct labor dollars. Also assume that estimated information for the year includes Direct labor dollars of $1,642,000. Finally, assume that the company sells its jobs at a selling price equal to (cost + 25% of cost markup).
Date + + + + + I + ī + ||| I General Journal Account/Explanation Page G2 PR Debit Credit

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