29) Armour, Inc., an advertising agency, applies overhead to jobs on the basis of directprofessional labor hours. Overhead was estimated to be $150,000, direct professionallabor hours were estimated to be 15,000, and direct professional labor cost was projectedto be $225,000. During the year, Amour incurred actual overhead costs of S146,000,actual direct professional labor hours of 14,500, and actual direct labor cost of $222,000.By year-end, the firm's overhead was:A) $1,000 overapplied.B) $5,000 underapplied.C) $4,000 overapplied.D) $1,000 underapplied.E) $4,000 underapplied.

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Description: 29) Armour, Inc., an advertising agency, applies overhead to jobs on the basis of directprofessional labor hours. Overhead was estimated to be $150,000, direct professionallabor hours were estimated to be 15,000, and direct professional labor cost w

Overhead is known as the ongoing business expenditures which are not directly associated with…

Business

Accounting

29) Armour, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $150,000, direct professional labor hours were estimated to be 15,000, and direct professional labor cost was projected to be $225,000. During the year, Armour incurred actual overhead costs of S146,000, actual direct professional labor hours of 14,500, and actual direct labor cost of $222,000. By year-end, the firm's overhead was: A) S1,000 overapplied. B) S5,000 underapplied. C) $4,000 overapplied. D) $1,000 underapplied. E) $4,000 underapplied.

29) Armour, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $150,000, direct professional labor hours were estimated to be 15,000, and direct professional labor cost was projected to be $225,000. During the year, Armour incurred actual overhead costs of S146,000, actual direct professional labor hours of 14,500, and actual direct labor cost of $222,000. By year-end, the firm's overhead was: A) S1,000 overapplied. B) S5,000 underapplied. C) $4,000 overapplied. D) $1,000 underapplied. E) $4,000 underapplied.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs with actual direct labor costs of $35,000 for Job 0301, $22,500 for Job 0302, $32,000 for Job 0303, and $16,000 for Job 0304. Actual manufacturing overhead costs for the year were $1, 710,000. Actual direct labor costs for the year were $735,000. Manufacturing overhead is applied to jobs based on direct labor costs using predetermined rates. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows: Work-in-process inventory $ 33,810 Finished goods inventory $ 270,480 Cost of goods sold $ 1,386, 210 Required: Prepare an entry to allocate the over- or underapplied overhead. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Henke corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 69,000 labor hours. The estimated variable manufacturing overhead was $7.30 per labor hour and the estimated total fix manufacturing overhead was $1,380,000. The actual labor hours for the year turned out to be 73,000 labor hours. Compute the company's predetermined overhead rate for the recently completed year
Jackson Company estimated that its manufacturing employees would work 87,000 direct labor hours during the current year. During the year, its manufacturing employees actually worked 71,500 direct labor hours. Actual manufacturing overhead costs amounted to $351,000 Jackson applies overhead cost on the basis of direct labor hours. The manufacturing overhead account was overapplied by $17.225 during the current year. Based on this information the predetermined overhead rate was Mutiple Choice $6.35 per lobor hour $475 per labor hour $524 per labor hour $515 per labor hour
Osborn Manufacturing uses a predetermined overhead rate of $19.70 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $265,950 of total manufacturing overhead for an estimated activity level of 13,500 direct labor-hours. The company actually incurred $260,000 of manufacturing overhead and 13,000 direct labor-hours during the period. Can you please help me with the following: Determine the amount of underapplied or overapplied manufacturing overhead for the period, then assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company’s gross margin? By how much?
The Winchester Company estimates that its overhead costs will amount to $523,600 and the company's manufacturing employees will work 77,000 direct labor hours during the current year. If actual overhead costs for the year amounted to $572,000 and actual labor hours amounted to 82,000, then overhead would be: Multiple Choice underapplied by $14,400. overapplied by $48,400. underapplied by $48,400. overapplied by $14,400.
Your Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its predetermined overhead rate to be $4 per direct labor hour since it estimated total manufacturing overhead cost at $400,000 and direct labor-hours at 100,000 hours. The actual overhead cost incurred during the year was $370,000 and the actual direct labor-hours incurred on jobs during the year was 90,000 hours. What is the difference between the applied manufacturing overhead and the actual manufacturing overhead? O $30,000 underapplied O $10,000 underapplied O $10,000 overapplied O $30,000 overapplied
Henkes Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 65,000 labor-hours. The estimated variable manufacturing overhead was $8.10 per labor-hour and the estimated total fixed manufacturing overhead was $1,092,000. The actual labor-hours for the year turned out to be 67,800 labor-hours. Required: Compute the company's predetermined overhead rate for the recently completed year Note: Round your answer to 2 decimal places. Predetermined overhead rate per labor-hour
Henkes Corporation bases its predetermined overhead rate on the estimated labor-hours for the upćoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 80,000 labor-hours. The estimated variable manufacturing overhead was $10.70 per labor-hour and the estimated total fixed manufacturing overhead was $1,440,000. The actual labor-hours for the year turned out to be 84,000 labor-hours. Required: Compute the company's predetermined overhead rate for the recently completed year. (Round your answer to 2 decimal places.) Predetermined overhead rate per labor-hour
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $421,800; materials of $412,000 and direct labor of $222,000. During the year Adams incurred $444,600 in materials costs, $439,600 in overhead costs and $226,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
Richey Company uses an actual cost accounting system that applies overhead on the basis of direct labor hours. At the beginning of the year, management estimated that during the year, the company would work 26,000 direct labor hours and budgeted $1,300,000 for MOH. The company actually worked 24,000 direct labor hours and incurred the following actual manufacturing costs: Direct materials used in production $1,240,000 Direct labor 1,800,000 Indirect labor 300,000 Indirect materials 220,000 Insurance 150,000 Utilities 190,000 Repairs and Maintenance 180,000 Depreciation 320,000 Determine the amount of underapplied or overapplied overhead for the year.
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Your Corporation uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing overhead was $1,200,000 and its estimated level of activity was 50,000 direct labor-hours. The company's direct labor wage rate is $12 per hour. Actual manufacturing overhead amounted to $1,240,000, with actual direct labor cost of $650,000. By how much was manufacturing overhead overapplied or underapplied?