ABC Company uses a job-order costing system and applies manufacturing overheadbased on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be$150,000, and the estimated machine hours are 25,000. The following information isfor the last month in 2020:Job 11Job 12Job 13TotalsWork in process, beginning$10,000$3,000$2,000$15,000Direct materials1,0009505002,450Direct labour costs9003001501,350Machine hours25015050450Actual manufacturing overhead costs incurred in the monthno beginning balance in the manufacturing overhead account at the start of the$3,500. There wasmonth.Questionsa)Calculate the pre-determined overhead rate.b)Calculate the total cost for each job.If Job No. 11 was completed during the month, what is the balance of WIP atthe end of the month?d).What is the balance of the manufacturing overhead account at the end of themonth? is manufacturing overhead over or underapplied?e)Prepare the journal entry to close underapplied or overapplied overhead tocost of goods sold.

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Description: ABC Company uses a job-order costing system and applies manufacturing overheadbased on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be$150,000, and the estimated machine hours are 25,000. The following information isfor the l

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ABC Company uses a job-order costing system and applies manufacturing overhead based on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be $150,000, and the estimated machine hours are 25,000. The following information is for the last month in 2020: 1111 Job 12 $3,000 Job 11 Job 13 Totals $15,000 2,450 $2,000 Work in process, beginning Direct materials $10,000 1,000 950 500 150 1,350 Direct labour costs Machine hours 900 300 250 150 50 450 Actual manufacturing overhead costs incurred in the month were $3,500. There was no beginning balance in the manufacturing overhead account at the start of the month. Questions a). Calculate the pre-determined overhead rate. b) Calculate the total cost for each job. If Job No. 11 was completed during the month, what is the balance of WIP at the end of the month? What is the balance of the manufacturing overhead account at the end of the month? Is manufacturing overhead over or underapplied? e). Prepare the journal entry to close underapplied or overapplied overhead to cost of goods sold.

ABC Company uses a job-order costing system and applies manufacturing overhead based on machine hours. For 2020, ABC Co. estimated manufacturing overhead to be $150,000, and the estimated machine hours are 25,000. The following information is for the last month in 2020: 1111 Job 12 $3,000 Job 11 Job 13 Totals $15,000 2,450 $2,000 Work in process, beginning Direct materials $10,000 1,000 950 500 150 1,350 Direct labour costs Machine hours 900 300 250 150 50 450 Actual manufacturing overhead costs incurred in the month were $3,500. There was no beginning balance in the manufacturing overhead account at the start of the month. Questions a). Calculate the pre-determined overhead rate. b) Calculate the total cost for each job. If Job No. 11 was completed during the month, what is the balance of WIP at the end of the month? What is the balance of the manufacturing overhead account at the end of the month? Is manufacturing overhead over or underapplied? e). Prepare the journal entry to close underapplied or overapplied overhead to cost of goods sold.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...

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