Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.9BE
Prepare entries for service salaries and wages and operating
Ruiz Engineering Contractors incurred service salaries and wages of $36,000 ($28,000 direct and $8,000 indirect) on an engineering project. The company applies overhead at a rate of 25% of direct labor. Record the entries to assign service salaries and wages and to apply overhead.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Flagler Company allocates overhead based on machine hours. It estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead.
(a) Calculate the overhead application rate for the year.(b) What is the amount of applied overhead for the year?(c) What is the amount of under or overapplied overhead for the year? Indicate whether it is over or underapplied.
At the beginning of the year, Custom Manufacturing set its predetermined overhead rate using the following estimates: overhead costs, $1,100,000, and direct materials costs, $500,000.At year-end, the company reports that actual overhead costs for the year are $1,108,600. 1. Determine the predetermined overhead rate using estimated direct materials costs2. Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year.3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.
Pharoah Engineering Contractors incurred employee payroll costs of $32,400 ($25,200 direct and $7,200 indirect) on an engineering
project. The company applies overhead at a rate of 25% of direct labor cost.
Record the entries to assign payroll liabilities and to apply overhead. (List all debit entries before credit entries. Credit account titles are
automatically indented when the amount is entered. Do not indent manually.)
Account Titles and Explanation
(To record service salary and wages)
(To record the applied overhead)
Debit
Credit
Chapter 2 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 2 - (a) Mary Barett is not sure about the difference...Ch. 2 - Prob. 2QCh. 2 - What type of industry is likely to use a job order...Ch. 2 - What type of industry is likely to use a process...Ch. 2 - Your roommate asks your help in understanding the...Ch. 2 - Prob. 6QCh. 2 - What source documents are used in accumulating...Ch. 2 - Entries to Manufacturing Overhead normally are...Ch. 2 - Stan Kaiser is confused about the source documents...Ch. 2 - What is the purpose of a job cost sheet?
Ch. 2 - Indicate the source documents that are used in...Ch. 2 - Explain the purpose and use of a materials...Ch. 2 - Sam Bowden believes actual manufacturing overhead...Ch. 2 - What elements are involved in computing a...Ch. 2 - Prob. 15QCh. 2 - Jane Neff believes that the cost of goods...Ch. 2 - Matt Litkee is confused about under- and...Ch. 2 - At the end of the year, under- or overapplied...Ch. 2 - Dicker Company begins operations on January 1....Ch. 2 - During January, its first month of operations,...Ch. 2 - In January, Dicker Company requisitions raw...Ch. 2 - Factory labor data for Dieker Company is given in...Ch. 2 - Data pertaining to job cost sheets for Dieker...Ch. 2 - Marquis Company estimates that annual...Ch. 2 - Assign manufacturing overhead to production.(LO...Ch. 2 - In March, Stinson Company completes Jobs 10 and...Ch. 2 - Prepare entries for service salaries and wages and...Ch. 2 - At December 31, balances in Manufacturing Overhead...Ch. 2 - During the current month, Wacholz Company incurs...Ch. 2 - Milner Company is working on two job orders. The...Ch. 2 - Washburn Company produces earbuds. During the...Ch. 2 - During the current month, Standard Corporation...Ch. 2 - For Eckstein Company, the predetermined overhead...Ch. 2 - The gross earnings of the factory workers for...Ch. 2 - Stine Company uses a job order cost system. On May...Ch. 2 - A job order cost sheet for Ryan Company is shown...Ch. 2 - Manufacturing cost data for Orlando Company, which...Ch. 2 - Ikerd Company applies manufacturing overhead to...Ch. 2 - Analyze job cost sheet aid prepare entry for...Ch. 2 - Crawford Corporation incurred the following...Ch. 2 - Enos Printing Corp. uses a job order cost system....Ch. 2 - At May 31, 2017, the accounts of Lopez Company...Ch. 2 - Tierney Company begins operations on April 1,...Ch. 2 - The following are the job cost related accounts...Ch. 2 - Determine cost of jobs end ending balance in work...Ch. 2 - Tombert Decorating uses a job order cost system to...Ch. 2 - Lott Company uses a job order cost system and...Ch. 2 - For the year ended December 31, 2017, the job cost...Ch. 2 - Prepare entries in a job order cost system and...Ch. 2 - Agassi Company uses a job order cost system in...Ch. 2 - Phillips Corporations fiscal year ends on November...Ch. 2 - Huegel Hollow Resort has ordered 20 rotomolded...Ch. 2 - Khan Products Company uses a job order cost...Ch. 2 - In the course of routine checking of all journal...Ch. 2 - Communication Activity You are the management...Ch. 2 - Prob. 2.5BYPCh. 2 - Prob. 2.6BYPCh. 2 - Prob. 2.7BYP
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
- The actual overhead for a company is $73,175. Overhead was based on 4,500 machine hours and was $3,325 over applied for the year. What is the overhead application rate per direct labor hour? What is the journal entry to dispose of the under applied overhead?arrow_forwardRulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?arrow_forwardWildhorse Engineering Contractors incurred employee payroll costs of $43,920 ($34,160 direct and $9,760 indirect) on an engineering project. The company applies overhead at a rate of 25% of direct labor cost. Record the entries to assign payroll liabilities and to apply overhead. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation (To record service salary and wages) (To record the applied overhead) Debit Creditarrow_forward
- The Brass Works is in the process of determining manufacturing overhead. Journalize events (a) (d) to Factory Overhead, Administrative Expenses, Selling Expenses, or allocated between the three as appropriate. The insurance policy and electric bill were paid in cash at the time of acquisition. Next calculate the overhead application rate and apply overhead to Work in Process. a. Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the value of the policy protects production, the balance protects the administrative offices. Brass Works charges insurance initially to expense. If an amount box does not require an entry, leave it blank.arrow_forwardAdams, Inc. estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation Supplies Materials handling Property taxes Production setup Rent Maintenance Supervisory salaries $190,800 20,800 32,800 14,800 20,000 44,500 38,600 157,700 The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 212,000 and for machines were 130,000. Required a. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the Year 3 period if actual machine hours were 145,000. (Do not round intermediate calculations.) a. Predetermined overhead rate b. Applied manufacturing overhead per machine hourarrow_forwardGomez company calculates its predetermined overhead on the basis of direct-labor hours. The predetermined overhead rate is $22.50. For the purpose of calculating predetermined overhead rate, total manufacturing overheads were estimated to be $326,250 and estimated activity level was 14,500 hours. The company incurred actual overheads of $356,000 for 11,600 hours. Using the given information, determine the manufacturing overheads applied to the jobs during the period. a. $289,460 b. $261,000 а. c. $284,800 с. d. $356,000arrow_forward
- The following information applies to Your Company for the current year: Direct labor-hours: Estimated for the year. 85,000 Actual hours worked. 80,000 Machine hours Estimated for the year. 92,000 Actual hours worked. 95,000 Manufacturing overhead: Estimated for the year $192,000 Actual cost incurred 200,000 Overhead cost is applied to production on a basis of direct labor hours. What is the predetermined overhead rate (round if necessary)? Group of answer choices $2.35 $2.09 $2.26 $2.40 $2.50arrow_forwardThe Brass Works is in the process of determining manufacturing overhead. Journalize the entries to record the following events to Factory Overhead, Administrative Expenses, and Selling Expenses, or allocated between the three as appropriate. All items were paid in cash at the time of acquisition. Next compute the overhead application rate and journalize the entry to apply overhead to Work in Process. a. Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the value of the policy protects production, and the balance protects the administrative offices. Brass Works charges insurance initially to expense. If an amount box does not require an entry, leave it blank. fill in the blank abd86b04df9ffeb_2 fill in the blank abd86b04df9ffeb_3 fill in the blank abd86b04df9ffeb_5 fill in the blank abd86b04df9ffeb_6 fill in the blank abd86b04df9ffeb_8 fill in the blank abd86b04df9ffeb_9 b. The electric bill shows an amount due of…arrow_forwardCaple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,660. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour. The predetermined overhead rate was based on how many estimated machine-hours? Question 19 options: 1,400 2,101 2,742 1,460arrow_forward
- Manufacturing overhead was estimated to be OMR 415,000 for the year along with estimated 20,000 direct labor hours. Actual manufacturing overhead was OMR 400,000, and actual labor hours were 21,000. The amount debited to the Manufacturing Overhead account would be: O a. OMR 435,750. O b. OMR 415,000. O c. None of the given answer is correct O d. OMR420,000. O e. OMR 400,000. A Company uses job order costing and has chosen direct labor hours to allocate its manufacturing overhead. The company estimates that total direct labor hours to be operated next year are 250,000 hours. The estimated variable overhead is $15 per hour and the estimated fixed overhead costs are $750,000. The predetermined overhead rate is:arrow_forwardRefer to the previous question. Give the journal entry to adjust the Manufacturing Overhead account for overallocated or underallocated overhead. Reference Question. If a company incurred $5,250 in actual overhead costs and allocated $5,575 to jobs, was the overhead overallocated or underallocated? By how much?arrow_forwardThe HY manufacturing company computes predetermined overhead rate on the basis of machine hours in the machining department and direct labor cost in the assembly department. The following estimates were made at the beginning of the year: Direct labor hours Direct labor cost Machine hours Manufacturing overhead Machining Assembly 12,000 $18,000 3,000 $15.000 8,000 $10,000 1,000 $20.000 Based on the above information, what are the predetermined overhead rates for machining department and assembly department? Select one: a. $5 and 100% b. $5 and 200% C. $6 and 200% d. $5 and 50% Previous padearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY