Agassi Company uses a job order cost system in each of its three manufacturing departments Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K In establishing the predetermined overhead rates for 2020, the following estimates were made for the year Manufacturing overhead Direct labor costs Direct labor hours Machine hours D $1.240,000 $1,550,000 Direct materials used Direct labor costs $1.500.000 $1.875,000 150.000 125,000 750,000 600,000 Department E Manufacturing overhead incurred Direct labor hours Machine hours $1,080.000 $675.000 During January, the job cost sheets showed the following costs and production data 60.000 Department E 120,000 K $210,000 $189,000 $117.000 $180,000 $165.000 $56,250 $148.500 $156,000 $118.500 12.000 16.500 5.250 $1.000 67,500 10,460
Agassi Company uses a job order cost system in each of its three manufacturing departments Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K In establishing the predetermined overhead rates for 2020, the following estimates were made for the year Manufacturing overhead Direct labor costs Direct labor hours Machine hours D $1.240,000 $1,550,000 Direct materials used Direct labor costs $1.500.000 $1.875,000 150.000 125,000 750,000 600,000 Department E Manufacturing overhead incurred Direct labor hours Machine hours $1,080.000 $675.000 During January, the job cost sheets showed the following costs and production data 60.000 Department E 120,000 K $210,000 $189,000 $117.000 $180,000 $165.000 $56,250 $148.500 $156,000 $118.500 12.000 16.500 5.250 $1.000 67,500 10,460
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Your answer is partially correct.
Compute the under-or overapplied overhead for each department at January 31.
Department D $
Department E
Department K
Manufacturing Overhead
4500
366000
148890
Underapplied v
Overapplied
Underapplied
Transcribed Image Text:Agassi Company uses a job order cost system in each of its three manufacturing departments Manufacturing overhead is applied to
jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K
In establishing the predetermined overhead rates for 2020, the following estimates were made for the year.
Manufacturing overhead
Direct labor costs
Direct labor hours
Machine hours
D
$1.240,000
$1,550,000
150,000
600,000
Direct materials used
Direct labor costs
Manufacturing overhead incurred i
Direct labor hours
Machine hours
Department
E
D
$1.500.000
$1.875,000
During January, the job cost sheets showed the following costs and production data.
Department
E
$210,000
$189,000
$180,000 $165,000 $56,250
$186,000
$148,500
125,000
750,000
12.000
51.000
K
$1,080.000
$675.000
60.000
120,000
16.500
67,500
K
$117,000
$118.500
5,250
10,460
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