Peter co makes shirts that it sells to retailers. The company uses a job order costing system in which predetermined overhead rates are used to apply factory overhead cost to jobs. The predetermined rate in the sewing department is based on machine hours and in cutting department is based on direct labor cost.The following estimates are made at the beginning of the year: (see picture)2. Compute the factory overhead rate using the cutting department during the year Sewing24,000Cutting120,000Direct Labor HoursMachine HoursDirect Material CostDirect Labor Cost140,0001,020,000260,0001,204,00010,0001,300,000840,0001,470,000Factory Overhead CostJob 101 was started on Feb 1 and completed on Feb 25. The company's cost records show the followinginformation concerning the job.SewingCuttingDirect Labor HoursMachine Hours6017022040Material Used940664Direct Labor Cost5801,360At the end of the year, the records of the company show the actual cost and data for all the jobs workedduring the year.Sewing20,000Cutting124,000Direct Labor HoursMachine Hours130,00018,000Direct Material Cost860,000216,0001,140,0001,360,000872,0001,500,000Direct Labor CostFactory Overhead Cost

Peter co makes shirts that it sells to retailers. The company uses a job order costing system in which predetermined overhead rates are used to apply factory overhead cost to jobs. The predetermined rate in the sewing department is based on machine hours and in cutting department is based on direct labor cost. The following estimates are made at the beginning of the year: (see picture) 2. Compute the factory overhead rate using the cutting department during the year

Peter co makes shirts that it sells to retailers. The company uses a job order costing system in which predetermined overhead rates are used to apply factory overhead cost to jobs. The predetermined rate in the sewing department is based on machine hours and in cutting department is based on direct labor cost. The following estimates are made at the beginning of the year: (see picture) 2. Compute the factory overhead rate using the cutting department during the year

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 13E: Job 19AB required 10,000 for direct materials, 4,000 for direct labor, 300 direct labor hours, 150...

See similar textbooks

Similar questions

Determining job costcalculation of predetermined rate for applying overhead by direct labor cost and direct labor hour methods Beemer Products Inc. has its factory divided into three departments, with individual factory overhead rates for each department. In each department, all the operations are sufficiently alike for the department to be regarded as a cost center. The estimated monthly factory overhead for the departments is as follows: Forming, 64,000; Shaping, 36,000; and Finishing, 10,080. The estimated production data include the following: The job cost ledger shows the following data for X6, which was completed during the month: Required: Determine the cost of X6. Assume that the factory overhead is applied to production orders, based on the following: 1. Direct labor cost 2. Direct labor hours (Hint: You must first determine overhead rates for each department, rounding rates to the nearest cent.)
A new company started production. Job 10 was completed, and Job 20 remains in production. Here is the information from job cost sheets from their first and only jobs so far: Using the information provided. A. What is the balance in work in process? B. What Is the balance in the finished goods inventory? C. If manufacturing overhead is applied on the basis of direct labor hours, what is the predetermined overhead rate?
JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD Hilburn Manufacturing Corporation had the following transactions for its job order costing operation. Prepare general journal entries to record these transactions. Jan.1 Purchased materials on account, 17,000. 15 Issued direct materials to Job No. 104, 11,000. 20 Issued indirect materials (factory overhead), 5,000. 31 Incurred direct labor, Job No. 104, 9,000. 31 Incurred indirect labor (factory overhead), 2,500. 31 Incurred other indirect costs (factory overhead; credit Accounts Payable), 2,000.
JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD Rich Manufacturing Corporation had the following transactions for its job order costing operation. Prepare general journal entries to record these transactions. Jan. 1 Purchased materials on account, 22,000. 15 Issued direct materials to Job No. 1, 18,000. 20 Issued indirect materials (factory overhead), 3,000. 31 Incurred direct labor, Job No. 1, 11,000. 31 Incurred indirect labor (factory overhead), 4,000. 31 Incurred other indirect costs (factory overhead; credit Accounts Payable), 1,500.
Inez has the following information relating to Job AA5. Direct material cost was $200,000, direct labor was $36,550, and overhead applied on the basis of direct labor hours was $73,100. What was the predetermined overhead rate using the labor rate of $17 per hour?
JOB ORDER COSTING WITH UNDER- AND OVERAPPLIED FACTORY OVERHEAD M. Evans Sons manufactures parts for radios. For each job order, it maintains ledger sheets on which it records direct labor, direct materials, and factory overhead applied. The factory overhead control account contains postings of actual overhead costs. At the end of the month, the under- or over applied factory overhead is charged to the cost of goods sold account. Factory overhead is applied on the basis of direct labor hours. For Job Nos. 101, 102,103, and 104, direct labor hours are 12, 000, 10,000, 11, 000, and 18,000, respectively. The overhead application rate is 1.20/direct labor hour. (a) Purchased raw materials on account, 50,000. (b) Issued direct materials: (c) Issued indirect materials to production, 8,000. (d) Incurred direct labor costs: (e) Charged indirect labor to production, 15,000. (f) Paid electricity bill, taxes, and repair fees for the factory and charged to production, 8,000. (g) Depreciation expense on factory equipment, 30,000. (h) Applied factory overhead to Job Nos. 101104 using the predetermined factory overhead rate (see above). (i) Finished Job Nos. 101103 and transferred to the finished goods inventory account as products N, O, and P. (j) Sold products N and for 50,000 and 45,400, respectively. (k) Transferred under- or over applied factory overhead balance to the cost of goods sold account. REQUIRED 1. Prepare general journal entries to record transactions (a) through (k). 2. Post the entries to the work in process and finished goods accounts only and determine the ending balances in these accounts. 3. Compute the balance in the job cost ledger and verify that this balance agrees with that in the work in process control account.
Nutt Products manufactures screws and bolts made to customer specifications. During August, Nutt incurred the following manufacturing costs: direct materials, 28,019.00; direct labor, 15,276.75; and applied factory overhead, 9,854.50. The following data pertain to these costs: The overhead application rates are 4 per direct labor hour for Dept. 1 and 175% of direct labor cost for Dept. 2. Nutt had no beginning work in process for August. Job 8958, which cost 14,190.18 to manufacture, was completed in July and was sold on account in August for 19,000. The job cost sheet for this job is shown on page 103. Of the jobs begun in August, Job 8961 was completed and sold on account for 24,000, Jobs 8962 and 8964 were completed but not sold, and Job 8963 was still in process. As cost accountant for this company, you have been asked to prepare job cost sheets for each of the four jobs started in August. Review the printed worksheet called JOB that follows these requirements.
PREDETERMINED FACTORY OVERHEAD RATE Millerlile Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 540,000. Total estimated direct labor hours are 50,000. Total estimated direct labor costs are 900,000. Total machine hours are estimated to be 80,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product 8 utilized 1,100 hours, what was the total amount of overhead assigned to the products? A. $35000 B. $30.800 C. $37,800 D. $68,600
PREDETERMINED FACTORY OVERHEAD RATE Marston Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 600,000. Total estimated direct labor hours are 30,000. Total estimated direct labor costs are 1,200,000. Total machine hours are estimated to be 200,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
JOB ORDER COSTING WITH UNDER- AND OVERAPPLIED FACTORY OVERHEAD M Evans Sons manufactures parts for radios. For each job order, it maintains ledger sheets on which it records direct labor, direct materials, and factory overhead applied. The factory overhead control account contains postings of actual overhead costs. At the end of the month, the under- or overapplied factory overhead is charged to the cost of goods sold account. Factory overhead is applied on the basis of direct labor hours. For Job Nos. 101, 102, 103, and 104, direct labor hours are 12,000, 10,000, 11,000, and 18,000, respectively. The overhead application rate is 1.20/direct labor hour (a) Purchased raw materials on account, 50,000. (b) Issued direct materials: (c) Issued indirect materials to production, 8,000. (d) Incurred direct labor costs: (e) Charged indirect labor to production, 15,000. (f) Paid electricity bill, taxes, and repair fees for the factory and charged to production, 8,000. (g) Depreciation expense on factory equipment, 30,000. (h) Applied factory overhead to Job Nos. 101-104 using the predetermined factory overhead rare (see above). (i) Finished Job Nos. 101-103 and transferred to the finished goods inventory account as products N, O, and P. (j) Sold products N and O for 50,000 and 45,400, respectively. (k) Transferred under- or overapplied factory overhead balance to the cost of goods sold account. REQUIRED 1. Prepare general journal entries to record transactions (a) through (k). Make compound entries for (b), (d), and (h), with separate debits for each job. 2. Post the entries to the work in process and finished goods T accounts only and determine the ending balances in these accounts. 3. Compute the balance in the job cost ledger and verify that this balance agrees with that in the work in process control account.
3. Milner Company is working on two job orders. The job cost sheets show the following. Job 201 Job 202 Direct materials $7,200 $9,000 Direct labor 4000 8,000 Manufacturing overhead 5,200 9,800 Required: Prepare the three summary entries to record the assignment of costs to work in process from the data on the job cost sheets.