Senangin Corporation uses a job-order costing system and applies overhead on the basis of direct labor hours. At the beginning of the year, management estimated that 125,000 direct labor hours would be worked and RM450,000 of manufacturing overhead costs would be incurred. During the year, the company actually worked 130,000 direct labor hours and incurred the following manufacturing costs: RM Direct materials used in production 380,000 Direct labor 400,000 Indirect labor 95,000 Indirect materials 67,500 Insurance (30% for factory assets) 30,000 Utilities (60% used for production) 42,000 Repairs and maintenance (100% for factory assets) 25,000 Depreciation on machine used in production 105,000 Depreciation on fixed assets in corporate block 78,000 Required: a) Calculate the predetermined overhead rate for the year. b) Determine the amount of manufacturing overhead applied to work in process during the year.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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QUESTION 1
Senangin Corporation uses a job-order costing system and applies overhead on the basis of
direct labor hours. At the beginning of the year, management estimated that 125,000 direct
labor hours would be worked and RM450,000 of manufacturing overhead costs would be
incurred.
During the year, the company actually worked 130,000 direct labor hours and incurred the
following manufacturing costs:
RM
Direct materials used in production
380,000
Direct labor
400,000
Indirect labor
95,000
Indirect materials
67,500
Insurance (30% for factory assets)
30,000
Utilities (60% used for production)
42,000
Repairs and maintenance (100% for factory assets)
25,000
Depreciation on machine used in production
105,000
Depreciation on fixed assets in corporate block
78,000
Required:
a) Calculate the predetermined overhead rate for the year.
b) Determine the amount of manufacturing overhead applied to work in process during the
year.
Transcribed Image Text:QUESTION 1 Senangin Corporation uses a job-order costing system and applies overhead on the basis of direct labor hours. At the beginning of the year, management estimated that 125,000 direct labor hours would be worked and RM450,000 of manufacturing overhead costs would be incurred. During the year, the company actually worked 130,000 direct labor hours and incurred the following manufacturing costs: RM Direct materials used in production 380,000 Direct labor 400,000 Indirect labor 95,000 Indirect materials 67,500 Insurance (30% for factory assets) 30,000 Utilities (60% used for production) 42,000 Repairs and maintenance (100% for factory assets) 25,000 Depreciation on machine used in production 105,000 Depreciation on fixed assets in corporate block 78,000 Required: a) Calculate the predetermined overhead rate for the year. b) Determine the amount of manufacturing overhead applied to work in process during the year.
c) Determine the amount of under-applied or over-applied overhead for the year.
d) Calculate the total manufacturing cost.
Transcribed Image Text:c) Determine the amount of under-applied or over-applied overhead for the year. d) Calculate the total manufacturing cost.
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