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

Section: Chapter Questions

Problem 1Q

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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.
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