The Harriot company manufacturing company uses job order costing system. The company uses machine hours to apply overhead cost to jobs. At the beginning of 2020, the company estimated that 31,400 machine hours would be worked and 5,024,000 overhear cost would be incurred during 2020 The following activities took place in the work in process inventory during February WIP Inventory A/C November 1 b/f $51250 Direct Materials used 256,400 Other transactions incurred: Indirect material issued to production was $40,360 Total manufacturing labour incurred in November wa $368,000, 75% of this amount represented direct labour Other manufacturing overhead costs incurred for November mounted to $340,490 Two jobs were completed with total cost o f $384,000 & 270,000 respectively. They were sold on account at a margin of 33 and a quart percent on sales. Require: I). Compute harriots predetermined manufacturing overhead rate for 2020. ii) state the journal entries necessary to record the above transactions in the general journal: Calculate the manufacturing overhead variance for Harriot and state the journal entries necessary to dispose of the variants iv) what is the balance on the cost of goods sold account after the adjustment V) calculate the gross profit earned by Harriot on the jobs completed Vi) Determine the balance in work in progress inventory on November 30th
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The Harriot company manufacturing company uses job order costing system. The company uses machine hours to apply overhead
The following activities took place in the work in process inventory during February
WIP Inventory A/C
November 1 b/f $51250
Direct Materials used 256,400
Other transactions incurred:
- Indirect material issued to production was $40,360
- Total manufacturing labour incurred in November wa $368,000, 75% of this amount represented direct labour
- Other
manufacturing overhead costs incurred for November mounted to $340,490
Two jobs were completed with total cost o f $384,000 & 270,000 respectively. They were sold on account at a margin of 33 and a quart percent on sales.
Require:
I). Compute harriots predetermined manufacturing overhead rate for 2020.
ii) state the
Calculate the manufacturing overhead variance for Harriot and state the journal entries necessary to dispose of the variants
iv) what is the balance on the cost of goods sold account after the adjustment
V) calculate the gross profit earned by Harriot on the jobs completed
Vi) Determine the balance in work in progress inventory on November 30th
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