Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 12, Problem 10E
Exercise 4-9A Allocating to solve a timing problem
Production workers for Chadwick Manufacturing Company provided 3,200 hours of labor in January and 2,800 hours in February. The company, whose operation is labor intensive, expects to use 48,000 hours of labor during the year. Chadwick paid a $120,000 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months.
Required
Explain why allocation is needed. Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question Content Area
Cavy Company estimates that the factory overhead for the following year will be $2,139,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 34,500 hours. The machine hours for the month of April for all of the jobs were 3,510. If the actual factory overhead for April totaled $222,408, determine the over- or underapplied amount for the month. Enter the amount as a positive number.$fill in the blank 1
Question No.8
King manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows.
Maintenance Rs.70,000
Material Handling 30,000
Set-ups 25,000
Inspection 50,000
Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labor hours, 50,000 direct labor hour are budgeted for next year?
The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would result in new business in future years. Usually, bids are based upon full manufacturing cost plus 30 percent.
Estimates for the proposed job are as follows:
Direct material Rs.2,500
Direct labor (750 hours) Rs.3,750
Number of machine hours 300
Number of material moves 8…
QUESTION 21
Preston Manufacturing is working on two housing projects. Overhead is applied on the basis of direct labor hours. At the beginning of the year, the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period: (a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours).(c) Project II was sold during the period for $120,000.The amount of estimated overhead applied to work in process inventory for the period equals: (Do not round your intermediate calculation.)
$51,200.
$64,000.
$44,000.
$54,400.
Chapter 12 Solutions
Survey Of Accounting
Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2QCh. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - 10.Why are some manufacturing costs not directly...
Ch. 12 - Prob. 11QCh. 12 - 12.On January 31, the managers of Integra, Inc....Ch. 12 - 13.Respond to the following statement: The...Ch. 12 - Prob. 14QCh. 12 - Define the term cost pool. How are cost pools...Ch. 12 - LO 4-1Exercise 4-1A Direct versus indirect costs...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Exercise 4-4APooling overhead cost Ware...Ch. 12 - Prob. 5ECh. 12 - Exercise 4-5A Allocating overhead cost among...Ch. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Exercise 4-6AAllocating overhead costs among...Ch. 12 - Exercise 4-9AAllocating to solve a timing problem...Ch. 12 - Prob. 11ECh. 12 - Exercise 4-11AHow the allocation of fixed cost...Ch. 12 - Prob. 13ECh. 12 - Problem 4-17A Cost accumulation and allocation...Ch. 12 - Problem 4-18A Selecting an appropriate cost driver...Ch. 12 - Problem 4-19A Cost allocation in a service...Ch. 12 - Prob. 17PCh. 12 - Problem 4-21A Allocation to accomplish smoothing...Ch. 12 - Problem 4-22A Allocating indirect costs between...Ch. 12 - Prob. 20PCh. 12 - Prob. 1ATCCh. 12 - Prob. 2ATCCh. 12 - ATC 4-3 Research Assignment Using real-world data...Ch. 12 - Prob. 4ATCCh. 12 - Prob. 5ATC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- QUESTION 2 Seroja Sdn. Bhd. manufactures customized equipment for local market. The budgeted data for the month of February 2019 were as follows: Machining Department Finishing Department Manufacturing overhead RM40,000 RM65,000 Direct labour hours 2,000 hours 10,000 hours Machine hours 4,000 hours 5,700 hours During the month, an order was received from Mr. Eric to manufacture an equipment for his personnel use. The job is known as Job E and the data pertaining to the job were as follows: Machining Department Finishing Department Direct material RM2,800 RM1,200 Direct labour hours 500 hours 50 hours Machine hours 300 hours 200 hours Wage rate per hour RM2.50 RM3.20 Additional information about Job E: Manufacturing overhead is absorbed based on machine hour for Machining department and direct labour hour for Finishing department. Administrative expenses incurred for Job E was 15%…arrow_forwardQuestion 3. Lenore Company makes clocks. The fixed overhead costs for 2019 total $880,000. The company uses direct labor-hours for fixed overhead allocation and anticipates 220,000 hours during the year for 330,000 units. An equal number of units are budgeted for each month. During June, 32,000 clocks were produced and $72,000 was spent on fixed overhead. a. Determine the fixed overhead rate for 2019 based on units of input.b. Determine the fixed overhead budget variance for June.C. Determine the production-volume overhead variance for June.arrow_forwardStandards for Nonmanufacturing Expenses CodeHead Software Inc. does software development. One important activity in software development is writing software code. The manager of the WordPro Development Team determined that the average software programmer could write 25 lines of code in an hour. The plan for the first week in May called for 4,650 lines of code to be written on the WordPro product. The WordPro Team has five programmers. Each programmer is hired from an employment firm that requires temporary employees to be hired for a minimum of a 40-hour week. Programmers are paid $32.00 per hour. The manager offered a bonus if the team could generate more lines for the week, without overtime. Due to a project emergency, the programmers wrote more code in the first week of May than planned. The actual amount of code written in the first week of May was 5,650 lines, without overtime. As a result, the bonus caused the average programmer's hourly rate to increase to $40.00 per hour during…arrow_forward
- QUESTION 7 Shoes Wisely, Inc. allocates overhead using machine hours as the allocation base. The following information was estimated at the beginning of the year: Estimated Manufacturing Overhead $83,000 Estimated Machine Hours 13,000 Actual overhead totaled $72,000. During the year, the company produced 8,500 units of product using 14,000 machine hours and 60,000 direct labor hours. How much manufacturing overhead was allcoated to the product during the year? Round your answer to whole dollars.arrow_forwardProblem 5 MOC Construction Company started work on three job sites during the current Data relating to year. Any costs incurred are expected to be recoverable. the three jobs are given below: Site Estimated Costs Contract Cost Billings on Collections on Billings 5,000,000 Price Incurred to Complete Contract 1 3,750,000 5,000,000 7,000,000 5,000,000 900,000 1,000,000 1,000,000 4,000,000 1,000,000 900,000 1,000,000 2 3 2,500,000 1,500,000 If the company records revenue over time, how much must be shown as current asset in the balance sheet of MOC Construction Company as of December 31? 5,500,000 500,000 A. c. 250,000 D. 100,000 в. If the company records revenue at a point in time, how much must be shown as current asset in the balance sheet of MOC Construction Company as of December 31? 5,100,000 500,000 A. C. 250,000 100,000 в. D.arrow_forwardAccounting Question 3 Barns Ltd. has three production departments: A, B, and C, and two service departments: Stores and Maintenance. The company absorbs its overhead costs on a machine hour basis in depts. A and B, and a labour hour basis in department C. The entity apportions indirect wages using labour hours worked in each department. The company has budgeted its production overhead costs for the forthcoming year as follows: Indirect wages Depreciation of plant Rent Power Canteen costs Plant insurance The following information is also available: Labour Hours Plant value Floor area (sq. m) Machine hours Employees Stores requisitions KWH ('000) A 9,000 $130,000 40,000 Material Direct Labour A Direct Labour B Direct Labour C 12,000 75 10,000 Machine hours A Machine hours B $ 96,000 376,000 147,000 72,000 123,000 117,500 100 B C 7,000 16,000 $70,000 $20,000 30,000 20,000 15,000 60 8,000 60 5,000 50 2,000 60 Stores Main. 4,000 4,000 $5,000 $10,000 10,000 5,000 nil 8 nil 40 kilos @ $5 per…arrow_forward
- QUESTION 10 Shoes Wisely, Inc. allocates overhead using machine hours as the allocation base. The following information was estimated at the beginning of the year: Estimated Manufacturing Overhead $68,000 Estimated Machine Hours 18,000 Actual overhead totaled $72,000. During the year, the company produced 8,500 units of product using 14,000 machine hours and 60,000 direct labor hours. How much manufacturing overhead was allcoated to the product during the year? Round your answer to whole dollars. esc Click Save and Submit to save and submit. Click Save All Answers to save all answers. 1 Q A 2 W S # 3 E ::: $ 4 D R % 5 TI MacBook Pro T 6 G & Y 7 H * 00 8 U J 9 Sa C Karrow_forwardPredetermined overhead rates and manufacturing overhead application (LO 4) Beltran Corporation produces wooden and aluminum baseball bats. In preparing the current budget, Beltran's management estimated a total of $500,000 in manufacturing overhead costs and 10,000 machine hours for the coming year. In December, Beltran's accountants reported actual manufacturing overhead incurred of $650,000 and 10,500 machine hours used during the year. Beltran applies overhead based on machine hours. Required a.What was Beltran's predetermined overhead rate for the year? bHow much manufacturing overhead did Beltran apply during the year?arrow_forwardOvertime Allocation Arlin Fabrication Company produces tools on a job order basis. During May, two jobs were completed, and the following costs were incurred: Other factory costs for the month totaled 16,800. Factory over-head costs are allocated one-third to Job 401 and two-thirds to Job 402. a. Describe two alternative methods for assigning the overtime premium cost to Jobs 401 and 402 and explain how the appropriate method would be determined. b. Compute the cost of Jobs 401 and 402 under each of the two methods described in part a.arrow_forward
- (Appendix 4A) Overhead Application, Journal Entries, Job Cost At the beginning of the year, Smith Company budgeted overhead of 129,600 as well as 13,500 direct labor hours. During the year, Job K456 was completed with the following information: direct materials cost, 2,750; direct labor cost, 5,355. The average wage for Smith Company employees is 17 per hour. By the end of the year, 18,100 direct labor hours had actually been worked, and Smith incurred the following actual overhead costs for the year: Required: 1. Calculate the overhead rate for the year. 2. Calculate the total cost of Job K456. 3. Prepare the journal entries to record actual overhead and to apply overhead to production for the year. 4. Is overhead overapplied or underapplied? By how much? 5. Assuming that the normal cost of goods sold for the year is 635,600, what is the adjusted cost of goods sold?arrow_forward(Appendix 4A) Journal Entries, T-Accounts Lowder Inc. builds custom conveyor systems for warehouses and distribution centers. During the month of July, the following occurred: a. Purchased materials on account for 42,630. b. Requisitioned materials totaling 27,000 for use in production: 12,500 for Job 703 and the remainder for Job 704. c. Recorded direct labor payroll for the month of 26,320 with an average wage of 14 per hour. Job 703 required 780 direct labor hours; Job 704 required 1,100 direct labor hours. d. Incurred and paid actual overhead of 19,950. e. Charged overhead to production at the rate of 10 per direct labor hour. f. Completed Job 703 and transferred it to Finished Goods. g. Kept Job 704, which was started during July, in process at the end of the month. h. Sold Job 700, which had been completed in May, on account for cost plus 30%. Beginning balances as of July 1 were: Required: 1. Prepare the journal entries for transactions a through e. 2. Prepare simple job-order cost sheets for Jobs 703 and 704. 3. Prepare the journal entries for transactions f and h. 4. Calculate the ending balances of the following: (a) Raw Materials, (b) Work in Process, and (c) Finished Goods.arrow_forwardBudget performance report for a cost center Sneed Industries Company sells vehicle parts to manufacturers of heavy construction equipment. The Crane Division is organized as a cost center. The budget for the Crane Division for the month ended August 31, 20Y6, is as follows (in thousands): During August, the costs incurred in the Crane Division were as follows: Instructions For which costs might the director be expected to request supplemental reports?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
INVENTORY & COST OF GOODS SOLD; Author: Accounting Stuff;https://www.youtube.com/watch?v=OB6RDzqvNbk;License: Standard Youtube License