Under- and overapplied overhead (LO 6) Kim-Brooks, Inc. makes costumes for movies and television shows. Brooks Kimberly, the company's owner, prepared the following estimates for the upcoming year: Manufacturing overhead cost $800,000 Direct labor hours 50,000 Direct labor cost $250,000 Machine hours 40,000 Required a.Assume that Kim-Brooks applies manufacturing overhead on the basis of direct labor hours. During the year, 49,800 direct labor hours were worked. How much overhead was applied to work in process? If actual manufacturing overhead for the year was $792,000, was overhead under- or overapplied during the year? By how much? bAssume that Kim-Brooks applies manufacturing overhead on the basis of direct labor cost. During the year, $245,000 in direct labor cost was incurred. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,600, was overhead under- or overapplied during the year? By how much? cAssume that Kim-Brooks applies manufacturing overhead on the basis of machine hours. During the year, 40,200 machine hours were worked. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,600, was overhead under- or overapplied during the year? By how much?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Under- and overapplied
|
$800,000
|
|
| Direct labor hours |
50,000
|
| Direct labor cost |
$250,000
|
| Machine hours |
40,000
|
Required
a.Assume that Kim-Brooks applies manufacturing overhead on the basis of direct labor hours. During the year, 49,800 direct labor hours were worked. How much overhead was applied to work in process? If actual manufacturing overhead for the year was $792,000, was overhead under- or overapplied during the year? By how much?
bAssume that Kim-Brooks applies manufacturing overhead on the basis of direct labor cost. During the year, $245,000 in direct labor cost was incurred. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,600, was overhead under- or overapplied during the year? By how much?
cAssume that Kim-Brooks applies manufacturing overhead on the basis of machine hours. During the year, 40,200 machine hours were worked. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,600, was overhead under- or overapplied during the year? By how much?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
