FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Your Company uses a predetermined
Dept. A | Dept. B | |
Direct labor cost | $56,000 | $33,000 |
Manufacturing overhead | $67,200 | $45,000 |
Direct labor hours | 8,000 | 9,000 |
Machine hours | 4,000 | 15,000 |
The Johnson job used 300 machine hours and incurred $5,000 of labor costs. What was the total overhead applied to this job?
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- The following information for the past year is available from Gas Company, a company that uses machine hours to apply standard factory overhead cost to outputs: Actual total factory overhead cost incurred $ 31,000 Actual fixed overhead cost incurred $ 12,000 Budgeted fixed overhead cost $ 14,000 Actual machine hours 4,000 Standard machine hours allowed for the units manufactured 5,200 Denominator volume—machine hours 4,500 Standard variable overhead rate per machine hour $ 3 The standard fixed overhead application rate, to two (2) decimal places, is: A. $5.11 per machine hourB. $2.11 per machine hourC. $4.11 per machine hourD. $3.11 per machine hourE. $6.11 per machine hourarrow_forwardHoneywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection $0.22 Cost Driver Orders Setups Machine hours $1.34 $1.86 $0.47 Parts Inspections Estimated Overhead $21,500 $31,100 $46,500 $51,600 $35,400 Cost Driver Activity. 500 orders 450 setups 125,000 hours 1,000,000 parts Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate? 500 inspections 45arrow_forwardWilmington Company has two manufacturing departments-Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year-Job Bravo. Estimated Data Manufacturing overhead costs Direct labor-hours Machine-hours Job Bravo Direct labor-hours Machine-hours Assembly $ 1,170,000 65,000 26,000 Assembly Fabrication 14 6 6 9 Fabrication $ 1,430,000 39,000 130,000 Total 20 15 1. Plantwide manufacturing overhead applied to Job Bravo 2. Manufacturing overhead applied from Assembly to Job Bravo 2. Manufacturing overhead applied from Fabrication to Job Bravo 2. Total departmental manufacturing overhead applied to Job Bravo Required: 1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo? 2. If…arrow_forward
- Assume that a company uses a standard cost system and applies overhead to production based on direct labor-hours. It provided the following excerpt from the standard cost card of its only product: Fixed manufacturing overhead During the most recent period, the following additional Information was available: • The total actual fixed overhead cost was $275,000. • The budgeted amount of fixed overhead cost was $285,000. • 46,000 direct labor-hours were actually used to produce 24,100 units. What is the standard hours allowed for the actual output? Multiple Choice O 92.000 hours 45,833 hours 48,200 hours Standard Hours. 2 hours. 47,500 hours Standard Rate $6.00 per hour Standard Cost $12.00arrow_forwardRequired information [The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 53,000 machine-hours would be required for the period's estimated level of production. It also estimated $1,080,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per machine-hour. Because Delph has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Job D-70 Direct materials cost Direct labor cost Machine-hours During the year, the company had no beginning or…arrow_forwardManufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $321,600. During that time, the company produced 14,600 units of the M-008 and 2,200 units of the M-123. The direct costs of production were as follows. Direct materials Direct labor M-008 M-123 $116,800 $ 88,000 116,800 44,000 Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows. Cost Driver Number of machine-hours Number of production runs Number of inspections. Total overhead Total $204,800 160,800 Costs $156, 600 70,000 95,000 $321,600 Activity Level M-898 M-123 2,000 8,000 20 30 20 20 Total 10,000 40 50 Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much of the overhead will be assigned to each product if direct…arrow_forward
- Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly I Inspection ( Cost Driver $1.20 per direct labor hour. $240 per order. $0.12 per part. $6,834 per order. Orders Setups Machine hours Parts Inspections Est. Overhead $ 120,000 297,000 1,500,000 1,200,000 MA 300,000 Cost Driver Activity W 500 orders 450 setups If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is 125,000 MH 1,000,000 parts 500 inspections P s 240arrow_forwardBobby Pte Ltd charges manufacturing overhead to products by using a pre-determined overhead rate, computed on the basis of labour hours. The following data pertain to the current year:Budgeted manufacturing overhead $480,000Actual manufacturing overhead $440,000Budgeted labour hours 20,000Actual labour hours 16,000How much is overhead over-applied or under-applied, stating clearly whether it is over or under applied.arrow_forwardWilmington Company has two manufacturing departments-Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year-Job Bravo. Estimated Data Assembly Fabrication Total Manufacturing overhead costs $3,200,000 $ 3,600,000 $ 6,800,000 Direct labor hours 100,000 60,000 160,000 Machine-hours 40,000 200,000 240,000 Job Bravo Assembly Fabrication Total Direct labor-hours 21 13 34 Machine - hours 13 16 29 Required: If Wilmington used a plantwide predetermined overhead rate based on direct labor - hours, how much manufacturing overhead would be applied to Job Bravo? If Wilmington uses departmental predetermined overhead rates with direct labor - hours as the allocation base in Assembly and machine - hours as the allocation base in Fabrication, how much manufacturing overhead would be…arrow_forward
- Wilmington Company has two manufacturing departments-Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year-Job Bravo. Estimated Data Manufacturing overhead costs Direct labor-hours Machine-hours Job Bravo Direct labor-hours Machine-hours Assembly $ 600,000 50,000 20,000 Assembly Fabrication 11 3 3 6 Total 14 9 1. Plantwide manufacturing overhead applied to Job Bravo 2. Manufacturing overhead applied from Assembly to Job Bravo 2. Manufacturing overhead applied from Fabrication to Job Bravo 2. Total departmental manufacturing overhead applied to Job Bravo Fabrication $ 800,000 30,000 100,000 Total $ 1,400,000 80,000 120,000 Required: 1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied…arrow_forwardRequired information Exercise 13-8 Payback Period and Simple Rate of Return [LO13-1, LO13-6] [The following information applies to the questions displayed below.] Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 280,000 Less operating expenses: Commissions to amusement houses $ 80,000 Insurance 57,000 Depreciation 19,920 Maintenance 60,000 216,920 Net operating income $ 63,080 Garrison 16e Rechecks 2017-05-22 Exercise 13-8 Part 2 2a. Compute the simple rate of return promised by the games. 2b. If the company requires a simple rate of return of at least 12%, will the games be purchased?arrow_forwardHararrow_forward
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