Managerial Accounting
5th Edition
ISBN: 9781259176494
Author: John J Wild, Ken Shaw Accounting Professor
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 2, Problem 16E
Moonrise Bakery applies factory
- Determine the company’s predetermined overhead rate for 2015.
- Assuming that the company’s $71,000 ending Work in Process Inventory accountant for 2015 had $20,000 of direct labor costs, determine the inventory’s direct materials costs.
- Assuming that the company’s ending Finished Goods Inventory account for 2015 had $250,000 of direct materials costs, determine the inventory’s direct labor costs and its overhead costs.
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In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following
cost predictions: overhead costs, $750,000, and direct materials costs, $625,000. At year-end 2017, the company's records show that
actual overhead costs for the year are $830,000. Actual direct material cost had been assigned to jobs as follows.
Jobs completed and soldi
Jobs in finished goods inventory
Jobs in work in process inventory
Total actual direct materials cost
1. Determine the predetermined overhead rate for 2017.
2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and
determine whether overhead is overapplied or underapplied.
4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
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Prepare the adjusting entry to allocate any over- or…
Hemingway Co. applies factory overhead based on direct labor costs. The company incurred the following costs during 2011: direct materials costs, $650,000; direct labor costs, $3 million; and factory overhead costs applied, $1,800,000. Assuming that the company's $490,000 ending finished goods inventory account for 2011 had $250,000 of direct materials costs, determine the inventories direct labor costs and its overhead costs.
Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during the year: direct materials costs, $650,000; direct labor costs, $3,000,000; and factory overhead costs applied, $1,800,000. 1. Determine the company’s predetermined overhead rate for the year. 2. Assuming that the company’s $71,000 ending Work in Process Inventory account for the year had $20,000 of direct labor costs, determine the inventory’s direct materials costs.
Chapter 2 Solutions
Managerial Accounting
Ch. 2 - Prob. 1MCQCh. 2 - A company uses direct labor costs to apply...Ch. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQ
Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - What events cause debits to be recorded in the...Ch. 2 - GOOGLE Google applies overhead to product costs....Ch. 2 - Prob. 10DQCh. 2 -
11. Why must a company use predetermined...Ch. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 1QSCh. 2 - The left column lists the titles of documents and...Ch. 2 - Prob. 3QSCh. 2 - Prob. 4QSCh. 2 - Prob. 5QSCh. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - Prob. 8QSCh. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Prob. 11QSCh. 2 - Prob. 12QSCh. 2 - Prob. 13QSCh. 2 - Prob. 14QSCh. 2 - Prob. 1ECh. 2 - Prob. 2ECh. 2 - Exercise 15-13 Analysis of cost flows C2
As of the...Ch. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Exercise 15-7 Cost flows in a job order costing...Ch. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - Prob. 13ECh. 2 - In December 2014, Custom Mfg. established...Ch. 2 - In December 2014, Infodeo established its...Ch. 2 - Moonrise Bakery applies factory overhead based on...Ch. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 1PSACh. 2 - Bergamo Bays computer system generated the...Ch. 2 - Widmer Watercrafts predetermined overhead rate for...Ch. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 1PSBCh. 2 - Cavallo Mfg.s computer system generated the...Ch. 2 - Prob. 3PSBCh. 2 - In December 2014, Pavelka Companys manager...Ch. 2 - Prob. 5PSBCh. 2 - SERIAL PROBLEM Business Solutions P1 P2 P3 (This...Ch. 2 - Prob. 1GLPCh. 2 - Apples financial statements and notes in Appendix...Ch. 2 - Prob. 2BTNCh. 2 - Prob. 3BTNCh. 2 - COMMUNICATING IN PRACTICE C1 C2
BTN 15-4 Assume...Ch. 2 - Prob. 5BTNCh. 2 - Prob. 6BTNCh. 2 - Prob. 7BTNCh. 2 - Prob. 8BTNCh. 2 - Prob. 9BTN
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- The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?arrow_forwardCompute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.arrow_forwardDuring the year, a company purchased raw materials of $77,321, and incurred direct labor costs of $125,900. Overhead is applied at the rate of 75% of the direct labor cost. These are the inventory balances: Compute the cost of materials used in production, the cost of goods manufactured, and the cost of goods sold.arrow_forward
- OReilly Manufacturing Co.s cost of goods sold for the month ended July 31 was 345,000. The ending work in process inventory was 90% of the beginning work in process inventory. Factory overhead was 50% of the direct labor cost. No indirect materials were used during the period. Other information pertaining to OReillys inventories and production for July is as follows: Required: 1. Prepare a statement of cost of goods manufactured for the month of July. (Hint: Set up a statement of cost of goods manufactured, putting the given information in the appropriate spaces and solving for the unknown information. Start by using cost of goods sold to solve for the cost of goods manufactured.) 2. Prepare a schedule to compute the prime cost incurred during July. 3. Prepare a schedule to compute the conversion cost charged to Work in Process during July.arrow_forwardThe books of Petry Products Co. revealed that the following general journal entry had been made at the end of the current accounting period: The total direct materials cost for the period was $40,000. The total direct labor cost, at an average rate of $10 per hour for direct labor, was one and one-half times the direct materials cost. Factory overhead was applied on the basis of $4 per direct labor hour. What was the total actual factory overhead incurred for the period? (Hint: First solve for direct labor cost and then for direct labor hours.)arrow_forwardQueen Bees Honey, Inc., estimated its annual overhead to be $110,000 and based its predetermined overhead rate on 27,500 direct labor hours. At the end of the year, actual overhead was $106,000 and the total direct labor hours were 29,000. What is the entry to dispose of the over applied or under applied overhead?arrow_forward
- Warren Company applies overhead based on direct labor cost. During 2014, Warren Company estimated that it would incur $180,000 in manufacturing overhead costs and $120,000 of direct labor costs. In 2014, actual manufacturing overhead cost totaled $150,000 and actual direct labor costs totaled $110,000. If total manufacturing costs were $320,000, what amount of direct materials was used during the period?arrow_forwardAgassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2014, the following estimates were made for the year. Department E D K Manufacturing overhead Direct labor costs Direct labor hours $1,200,000 $1,500,000 $1,500,000 $1,250,000 125,000 500,000 $900,000 $450,000 40,000 120,000 100,000 Machine hours 400,000 During January, the job cost sheets showed the following costs and production data. Department D E K Direct materials used $140,000 $120,000 $ 99,000 8,000 34,000 $126,000 $110,000 $78,000 $37,500 $79,000 Direct labor costs Manufacturing overhead incurred Direct labor hours $124,000 11,000 3,500 Machine hours 45,000 10,400 (a) Compute the predetermined overhead rate for each department. (b) Compute the total manufacturing costs…arrow_forwardCoop's Stoops estimated its annual overhead to be $72,000 and based its predetermined overhead rate on 24,000 direct labor hours. At the end of the year, actual overhead was $77,190 and the total direct labor hours were 23,830. What is the entry to dispose of the overapplied or underapplied overhead? If an amount box does not require an entry, leave it blank. Cost of Goods Sold ✓✓ Manufacturing Overhead X ✓ ✓ Xarrow_forward
- Tasty Bakery applies overhead based on direct labor costs. The company reports the following costs for the year: direct materials, $710,000; direct labor, $3,600,000; and overhead applied, $2,520,000. 1. Determine the company's predetermined overhead rate for the year. 2. The ending balance of its Work in Process Inventory account was $77,000, which included $26,000 of direct labor costs. Determine the direct materials costs in ending Work in Process Inventory.arrow_forwardIn December 2014, Custom Mfg. established its predetermined overhead rate for jobs produced during year 2015 by using the following cost predictions: overhead costs, $400,000, and direct labor costs, $200,000. At year-end 2015, the company’s records show that actual overhead costs for the year are $1,049,200. Actual direct labor cost had been assigned to jobs as follows. Jobs completed and sold $ 400,000 Jobs in finished goods inventory 74,000 Jobs in work in process inventory 46,000 Total actual direct labor cost $ 520,000 4. Required information 1. Determine the predetermined overhead rate for year 2015.arrow_forwardAgassi Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2017, the following estimates were made for the year. D $1,200,000 $1,500,000 Direct materials used Direct labor costs Manufacturing overhead Direct labor costs Direct labor hours Machine hours During January, the job cost sheets showed the following costs and production data. Department E $126,000 $110,000 $124,000 Manufacturing overhead incurred Direct labor hours Machine hours Department E $1,500,000 $1,250,000 100,000 400,000 D $140,000 $120,000 $ 99,000 8,000 34,000 125,000 500,000 K $900,000 $450,000 11,000 45,000 40,000 120,000 K $78,000 $37,500 $79,000 3,500 10,400 Instructions (a)Compute the predetermined overhead rate for each department. (b) Compute the total…arrow_forward
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