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afayette Furniture Company, is in the process of he month of November. She has gathered the 3,500 3,000 2,000

afayette Furniture Company, is in the process of he month of November. She has gathered the 3,500 3,000 2,000

FINANCIAL ACCOUNTING
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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PLS HELP: Overhead Application Problem & provide explanation.

 

Overhead Application Problem. Tina Jeffrey, the controller for Lafayette Furniture Company, is in the process of analyzing the overhead cost for the month of November. She has gathered the following data for the month: LABOR Direct Labor hours: Job 77 3,500 Job 78 Job 79 Labor costs: 3,000 2,000 Direct- labor wages Indirect-labor wages (4,000 hrs.) Supervisory salaries P 51,000 15,000 6,000 Material Inventories, November 1: Raw materials and Supplies P 10,500 Work in process (job 77) Finished goods Purchase of Raw Materials and Supplies : Raw material 54,000 112,000 overhead application. In December of the preceding year, Jeffrey had prepared the following budget of direct-labor and manufacturing-overhead costs for the current year. The plant is capable of operating at 150,000 direct-labor hours per year. However, Jeffrey estimates that the normal usage is 120,000 hours in a typical year. P 135,000 Supplies (Indirect mat.) Direct materials and supplies requisitioned for production: Job 77 15,000 P 45,000 37,500 25,500 12.000 P 120,000 Manufacturing overhead Fixed P 216,000 216,000 216,000 Variable P 325,000 390,000 Job 78 Direct-labor hours Job 79 100.000 120.000 Supplies( indirect mat.) Total 140,000 455,000 Other During November the following jobs were completed: Building occupancy costs (heat, light, depreciation, etc): Factory facilities Sales offices Administrative office P 6,400 Job 77 Job 78 Side chairs End tables 1,600 1.000 P 9,000 Total Required: Assist Jeffrey by making the following calculations. 1.Calculate the predetermined overhead rate for the current year. 2.Calculate the total cost of job 77. Production equipment costs: Power Repairs and maintenance Depreciation Other Total P 4,100 1,500 1,500 1,000 P 8,100 3.Compute the amount of manufacturing overhead applied to job 79 during November. 4. What was the total amount of manufacturing overhead applied during November? 5 Compute the actual manufacturing overhead incurred during November. The firm's job -order costing system uses direct labor hours as the cost driver for 6.Calculate the overapplied or underapplied overhead for November.
Transcribed Image Text:Overhead Application Problem. Tina Jeffrey, the controller for Lafayette Furniture Company, is in the process of analyzing the overhead cost for the month of November. She has gathered the following data for the month: LABOR Direct Labor hours: Job 77 3,500 Job 78 Job 79 Labor costs: 3,000 2,000 Direct- labor wages Indirect-labor wages (4,000 hrs.) Supervisory salaries P 51,000 15,000 6,000 Material Inventories, November 1: Raw materials and Supplies P 10,500 Work in process (job 77) Finished goods Purchase of Raw Materials and Supplies : Raw material 54,000 112,000 overhead application. In December of the preceding year, Jeffrey had prepared the following budget of direct-labor and manufacturing-overhead costs for the current year. The plant is capable of operating at 150,000 direct-labor hours per year. However, Jeffrey estimates that the normal usage is 120,000 hours in a typical year. P 135,000 Supplies (Indirect mat.) Direct materials and supplies requisitioned for production: Job 77 15,000 P 45,000 37,500 25,500 12.000 P 120,000 Manufacturing overhead Fixed P 216,000 216,000 216,000 Variable P 325,000 390,000 Job 78 Direct-labor hours Job 79 100.000 120.000 Supplies( indirect mat.) Total 140,000 455,000 Other During November the following jobs were completed: Building occupancy costs (heat, light, depreciation, etc): Factory facilities Sales offices Administrative office P 6,400 Job 77 Job 78 Side chairs End tables 1,600 1.000 P 9,000 Total Required: Assist Jeffrey by making the following calculations. 1.Calculate the predetermined overhead rate for the current year. 2.Calculate the total cost of job 77. Production equipment costs: Power Repairs and maintenance Depreciation Other Total P 4,100 1,500 1,500 1,000 P 8,100 3.Compute the amount of manufacturing overhead applied to job 79 during November. 4. What was the total amount of manufacturing overhead applied during November? 5 Compute the actual manufacturing overhead incurred during November. The firm's job -order costing system uses direct labor hours as the cost driver for 6.Calculate the overapplied or underapplied overhead for November.
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