Marvel Limited manufactures a variety of components for commercial applications. The firm utilizes joborder costing with a predetermined overhead rate of $4.50 per machine hour. During June 2020, MarvelLimited Worked on the following jobs:Direct Materials used on JobDirect Labour CostMachine HoursJob #52Job #53Job #54$14,910$16,640$7,010$19,450$13,600$10,0501,3901,480830a) Calculate the amount of overhead to be allocated to each job for the month

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Answered: Marvel Limited manufactures a variety…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1EA: Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor...

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Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
Ceria Cubicles a furniture manufacturer, has two departments, Fabrication and Assembly. This company is using job order costing system for all jobs that need to go through each department. Overhead is applied to jobs based on machine hours in Fabrication and on labour hours in Assembly. In December 2018, corporate management estimated the following production data for 2019 in setting its predetermined overhead rates: Fabrication AssemblyMachine hours 65,000 21,000Direct labour hours 20,200 220,000Departmental overhead RM800,000 RM880,000 Two jobs completed during 2019 were No. 223 and No. 224. The job order cost sheets showed the following information about these jobs: No. 223…
Rally Baling Sdn Bhd (RBSB) makes custom made kitchen cabinet. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. Currently, RBSB uses a plantwide overhead rate based on direct labor costs in estimating the company manufacturing overhead. The following estimated data have been made by RBSB at the beginning of the year 2020: Department Costs Moulding Assembling Finishing Direct labor hours 10,000 40,000 8,000 Machine hours 50,000 10,000 10,000 Direct labor costs RM50,000 RM80,000 RM50,000 Direct materials costs RM120,000 RM165,000 RM70,000 Manufacturing overhead costs RM180,000 RM220,000 RM20,000 Job No. 120 was started on 1 January 2020 and completed on 31 January 2020. This job was ordered by Wan Kemara School in Changlun, Kedah. RBSB’s cost records shown the following information on the Job No. 120: Department Costs…
Biz Company uses a job order cost system and applies factory overhead to production orders on the basis of direct labor cost. The overhead rates for 2020 are 150% for Dept. A and 100% for Dept. B. Job 915, started and completed during 2020, was charged with the following cost: Dept A: DM $30,000; DL ?; Applied FOH $45,000. Dept. B: DM $8,000; DL $25,000; Applied FOH ? The total manufacturing costs associated with Job 915 should be $148,000. $163,000. $160,500. $108,000.
The Plastic Manufacturing Company uses the Job Order Costing and applies manufacturing overhead costs to units produced using an appropriate base. The activities for September 2020 are shown below: Direct Material Inventory used $ 45,000 Indirect Material Inventory used $ 4,000 Direct Manufacturing Labor $ 53,500 Applied Manufacturing Overhead $ 56,500 Actual Manufacturing Overhead $ 62,500 Beginning and Ending Work In Process $ 0 What is the cost of jobs completed in September 2020? а. $ 151,000 b. $ 155,000 $ 161,500 d. $ 161,000
Hamada company uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs). During 2020, Indirect manufacturing labor cost incurred $1,300,000. The journal entry is: a. Work-in-Process Control debit $1,300,000 and Wages payable control credit $1,300,000. b. Manufacturing Overhead Control debit $1,300,000 and Materials Control credit $1,300,000. c. Wages payable control debit $1,300,000 and Work-in-Process Control credit $1,300,000. d. Wages payable control debit $1,300,000 and Manufacturing Overhead Control credit $1,300,000.
Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials. Direct labor-hours Direct labor wage rate Machine-hours The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $19 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be: Multiple Choice $7,236 $3,793 $3,720 $6,396 Prev $ 2,461 2 of 7 74 labor-hours $ 18 per labor-hour 137 machine-hours Next
Carib Tings & More does hand-crafted memorabilia for the tourism industry, in which each batch of items is a job. The company has a highly machine intensive production process, so it allocates manufacturing overhead based on machine hours. Carib Tings & More pre-determined overhead application rate for 2024 was computed from the following data: Total estimated factory overheads $2,400,000 Total estimated machine hours 40,000 At the end of May 2024, Carib Tings & More reported work in process inventory of $176,000. During June 2024, Carib Tings & More actually used 3,000 machine hours and recorded the following transactions. Purchased $324,000 worth of materials on account. Separately, Carib Tings & More paid a $2,500 bill for freight in. i) ii) Manufacturing wages incurred $400,000 iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000 iv) Assigned manufacturing wages, 85% direct labour, 15% indirect labour v) Depreciation expense on factory equipment used on…
Carib Tings & More does hand-crafted memorabilia for the tourism industry, in which each batch of items is a job. The company has a highly machine intensive production process, so it allocates manufacturing overhead based on machine hours. Carib Tings & More pre-determined overhead application rate for 2024 was computed from the following data: Total estimated factory overheads $2,400,000 Total estimated machine hours 40,000 At the end of May 2024, Carib Tings & More reported work in process inventory of $176,000. During June 2024, Carib Tings & More actually used 3,000 machine hours and recorded the following transactions. Purchased $324,000 worth of materials on account. Separately, Carib Tings & More paid a $2,500 bill for freight in. i) ii) Manufacturing wages incurred $400,000 iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000 iv) Assigned manufacturing wages, 85% direct labour, 15% indirect labour v) vi) Depreciation expense on factory equipment used…

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