Homework Help is Here – Start Your Trial Now!
Business
Accounting
238 Problem 4 The Ellery Corporation uses the job order cost system of account a list of the jobs completed during the month of March show materials requisitioned and for direct labor cost. Job Material Cost Direct labo P. 123 300 1,080 720 600 124 940 1,400 5,120 125 126 4,200 Required: Assuming that factory overhead is applied on the basis of direc the predetermined rate is 180%, compute: 1. The amount of overhead to be added to the cost of each job c 2. The total cost of each job completed during the month.

238 Problem 4 The Ellery Corporation uses the job order cost system of account a list of the jobs completed during the month of March show materials requisitioned and for direct labor cost. Job Material Cost Direct labo P. 123 300 1,080 720 600 124 940 1,400 5,120 125 126 4,200 Required: Assuming that factory overhead is applied on the basis of direc the predetermined rate is 180%, compute: 1. The amount of overhead to be added to the cost of each job c 2. The total cost of each job completed during the month.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Topic Video
Question
2021.12.0203:13 Cost Accounting CHAPTER 238 Cost Accounting Chapter 8 Accounting for Factory Overhead Problem 4 The Ellery Corporation uses the job order coșt system of accounting. Shown below is a list of the jobs completed during the month of March showing the charges for materials requisitioned and for direct labor cost. Problem 6 The ABC Company has two service departments and two producing departments Job 123 Material Cost P 300 1,080 Service Departments' to costs: Department 1 - Repair Department 2 - Cafeteria P 14,000 11,000 Direct labor P 600 124 940 1,400 5,120 Próducing Departments' Factory OH Costs Department A - Machinery Department B - Assembly 52,500 48,000 125 720 126 4,200 Required: Assuming that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 180%, compute: 1. The amount of overhead to be added to the cost of each job completed 2. The total cost of each job completed during the month. Additional information Square Feet 1,500 1,800 2,000 3,000 8.300 The costs of the Repair Department are allocated on the basis of square feet. The costs of the Cafeteria Department are allocated on the basis of estimated direct labor hours. The producing departments use estimated direct labor hours: 1,500 in Department A and 1,250 in Department B. Required: Allocate the total costs of the service departments to the producing departments ( compute the departments' factory rate) by using the following: Est. Direct Labor Hours 3,500 1,200 2,300 1,700 8,700 Department Repair Cafeteria Machinery Assembly Total Problem 5 Thermal Corporation has two producing department and two service departments labeled P1, P2, S1, and S2, respectively. Direct costs for each department and the proportion of services costs used by various departments are as follows: Proportion of services used by: P2 Cost Direct Center P1 Costs P. S1 S2 P1 90,000 60,000 20,000 32,000 P2 1. Direct method .10 S1. S2 .80 .10 2. Step method start with the Repair Department .20 .50 .30 In calculating predetermined overhead rates, machine hours are used as the base in PI Problem 7 and direct labor hours as the base in P2. Machine hours Direct labor hours P1 50,000 40,000 P2 40,000 20,000 Central Parkway Corp. has two producing and two service departments labeled P1, P2, S1, S2, respectively. Direct costs for each department and the proportion of service costs used by the various departments are as follows: Requirements: 1. Allocate the şervice department costs to operating departments and compute the factory overhead rate for P1 and P2 using the following methods: A. Direct Method b. Step method - start with S1 Proportion of services used by: P1 Cost Direct Çenter P2 Costs P 120,000 80,000 25,000 10,000 S1 S2 P1 P2 S1 .25 .50 .25 :50 .40 c. Algebraic method 2. Assume the company uses just one basis for applying overhead to jobs going through both P1 and P2, compute the overhead rate using direct labor hours as base. S2 .10 Required: Allocate the service department cost using algebraic method. 19 19 4
Transcribed Image Text:2021.12.0203:13 Cost Accounting CHAPTER 238 Cost Accounting Chapter 8 Accounting for Factory Overhead Problem 4 The Ellery Corporation uses the job order coșt system of accounting. Shown below is a list of the jobs completed during the month of March showing the charges for materials requisitioned and for direct labor cost. Problem 6 The ABC Company has two service departments and two producing departments Job 123 Material Cost P 300 1,080 Service Departments' to costs: Department 1 - Repair Department 2 - Cafeteria P 14,000 11,000 Direct labor P 600 124 940 1,400 5,120 Próducing Departments' Factory OH Costs Department A - Machinery Department B - Assembly 52,500 48,000 125 720 126 4,200 Required: Assuming that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 180%, compute: 1. The amount of overhead to be added to the cost of each job completed 2. The total cost of each job completed during the month. Additional information Square Feet 1,500 1,800 2,000 3,000 8.300 The costs of the Repair Department are allocated on the basis of square feet. The costs of the Cafeteria Department are allocated on the basis of estimated direct labor hours. The producing departments use estimated direct labor hours: 1,500 in Department A and 1,250 in Department B. Required: Allocate the total costs of the service departments to the producing departments ( compute the departments' factory rate) by using the following: Est. Direct Labor Hours 3,500 1,200 2,300 1,700 8,700 Department Repair Cafeteria Machinery Assembly Total Problem 5 Thermal Corporation has two producing department and two service departments labeled P1, P2, S1, and S2, respectively. Direct costs for each department and the proportion of services costs used by various departments are as follows: Proportion of services used by: P2 Cost Direct Center P1 Costs P. S1 S2 P1 90,000 60,000 20,000 32,000 P2 1. Direct method .10 S1. S2 .80 .10 2. Step method start with the Repair Department .20 .50 .30 In calculating predetermined overhead rates, machine hours are used as the base in PI Problem 7 and direct labor hours as the base in P2. Machine hours Direct labor hours P1 50,000 40,000 P2 40,000 20,000 Central Parkway Corp. has two producing and two service departments labeled P1, P2, S1, S2, respectively. Direct costs for each department and the proportion of service costs used by the various departments are as follows: Requirements: 1. Allocate the şervice department costs to operating departments and compute the factory overhead rate for P1 and P2 using the following methods: A. Direct Method b. Step method - start with S1 Proportion of services used by: P1 Cost Direct Çenter P2 Costs P 120,000 80,000 25,000 10,000 S1 S2 P1 P2 S1 .25 .50 .25 :50 .40 c. Algebraic method 2. Assume the company uses just one basis for applying overhead to jobs going through both P1 and P2, compute the overhead rate using direct labor hours as base. S2 .10 Required: Allocate the service department cost using algebraic method. 19 19 4
Cost Accounting CHAPTER 2021.12.02 03:13 Cost Accounting 241 Problem 8 Chapter 8 Accounting for Factory Overhead Problem 11 The Strawberry Corporation has the following information relating to applied and actual factory overhead: Megastar Company's normal operating capacity is estimated at 95,000 machine hours per month. At this operating level, fixed factory overhead is estimated to be P 34,200 and variable factory overhead is.estimated to be P41,800. During November, the company operated 100,000 machine hours. Actual factory overhead for the month totaled P78,600. Required: Compute for the following 1. The over or underapplied factory overhead 2. The spending variance. 3. The idle capacity variance. P30,500 39,700 Applied factory overhead costs are in the following accounts. P32,000 3,500 4,200 Factory overhead control Applied factory overhead Cost of goods sold Ending work in process inventory Ending finished goods inventory Required: a. Allocate the under or overapplied factory overhead to those accounts distorted by using what turned out to be an incorrect factory overhead application rate. b. Prepare the end-of-period entries. . Problem 9 Normal annual capacity for Abner Company is 72,000 units, with fixed factory overhead budgeted at P33,840 and an estimated variable factory overhead rate for P4.20. per unit. During October, actual production was 5,400 units, with a total overhead of P15,910. Required: Compute for the following 1. The applied factory overhead 2. The over or underapplied factory overhead 3. The spending variance Problem 12 For many years Tinor Company has used a manufacturing overhead rate based on direct labor hours. A new plant accountant has suggested that the company may be able to assign overhead costs to products more accurately by using an activity-based costing system. The accountant explains that by creating an overhead rate for each production activity that causeş overhead costs, the resulting product costs will reflect an accurate measure of overhead cost. The direct material cost is P120 per unit. The budgeted hours is 8,030 direct labor hours. The accountant has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for 2012: 4. The idle capacity variance ACTIVITY CENTERS COSTS ACTIVITY DRIVERS Problem 10 Materials handling Scheduling and setups Design section No. of parts P 60,000 80,000 10,750 50.000 P 200.750 1,200 times handled 400 setups 100 changes 500 parts Norman Corporation uses a flexible budget system and prepared the following information for 2012. Normal Capacity Maximum Capacity Percentage of capacity Direct labor hours Total budgeted factory overhead P252,000 Norman planned to operate at normal capacity but actually operated, at 90% of maximum capacity during 2012. The actual factory overhead for 2012 was P273,000: %08 48,000 The company's products and other operating statistics follow: 60,000 P270,000 No. of No. of Qty. Produced No. of time No. of Prod. Parts Changes Setups Cost P6,000 18,000 Handled A. B. Required: 1. Compute the unit cost for each product using direct labor hours as the overhead application base. 2. Compute the unit costs for each product using activity-based costing 20 .40. 3. 5. Requirements: 1. Using HI-LÓ method, compute for the variable rate per hour. 2. Détermine the fixed portion of the budgeted factory overhead. 3. Compute for the spending variance. 4. Compute for the Idle capacity variance. 19 19 20 17. 26
Transcribed Image Text:Cost Accounting CHAPTER 2021.12.02 03:13 Cost Accounting 241 Problem 8 Chapter 8 Accounting for Factory Overhead Problem 11 The Strawberry Corporation has the following information relating to applied and actual factory overhead: Megastar Company's normal operating capacity is estimated at 95,000 machine hours per month. At this operating level, fixed factory overhead is estimated to be P 34,200 and variable factory overhead is.estimated to be P41,800. During November, the company operated 100,000 machine hours. Actual factory overhead for the month totaled P78,600. Required: Compute for the following 1. The over or underapplied factory overhead 2. The spending variance. 3. The idle capacity variance. P30,500 39,700 Applied factory overhead costs are in the following accounts. P32,000 3,500 4,200 Factory overhead control Applied factory overhead Cost of goods sold Ending work in process inventory Ending finished goods inventory Required: a. Allocate the under or overapplied factory overhead to those accounts distorted by using what turned out to be an incorrect factory overhead application rate. b. Prepare the end-of-period entries. . Problem 9 Normal annual capacity for Abner Company is 72,000 units, with fixed factory overhead budgeted at P33,840 and an estimated variable factory overhead rate for P4.20. per unit. During October, actual production was 5,400 units, with a total overhead of P15,910. Required: Compute for the following 1. The applied factory overhead 2. The over or underapplied factory overhead 3. The spending variance Problem 12 For many years Tinor Company has used a manufacturing overhead rate based on direct labor hours. A new plant accountant has suggested that the company may be able to assign overhead costs to products more accurately by using an activity-based costing system. The accountant explains that by creating an overhead rate for each production activity that causeş overhead costs, the resulting product costs will reflect an accurate measure of overhead cost. The direct material cost is P120 per unit. The budgeted hours is 8,030 direct labor hours. The accountant has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for 2012: 4. The idle capacity variance ACTIVITY CENTERS COSTS ACTIVITY DRIVERS Problem 10 Materials handling Scheduling and setups Design section No. of parts P 60,000 80,000 10,750 50.000 P 200.750 1,200 times handled 400 setups 100 changes 500 parts Norman Corporation uses a flexible budget system and prepared the following information for 2012. Normal Capacity Maximum Capacity Percentage of capacity Direct labor hours Total budgeted factory overhead P252,000 Norman planned to operate at normal capacity but actually operated, at 90% of maximum capacity during 2012. The actual factory overhead for 2012 was P273,000: %08 48,000 The company's products and other operating statistics follow: 60,000 P270,000 No. of No. of Qty. Produced No. of time No. of Prod. Parts Changes Setups Cost P6,000 18,000 Handled A. B. Required: 1. Compute the unit cost for each product using direct labor hours as the overhead application base. 2. Compute the unit costs for each product using activity-based costing 20 .40. 3. 5. Requirements: 1. Using HI-LÓ method, compute for the variable rate per hour. 2. Détermine the fixed portion of the budgeted factory overhead. 3. Compute for the spending variance. 4. Compute for the Idle capacity variance. 19 19 20 17. 26
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Costing Systems
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS