Alpha Corporation applies overhead costs to jobs on the basis of direct labor costs. Job O, which was started and completed during the current period, shows charges of $6,850 for direct materials, $10,300 for direct labor, and $6,710 for overhead on its job cost sheet. Job O, which is still in process at year-end, shows charges of $3,500 for direct materials and $5,800 for direct labor. a. Should any overhead cost be applied to Job O at year-end? b. How much overhead cost should be applied to Job O? I want solution for both part

Alpha Corporation applies overhead costs to jobs on the basis of direct labor costs. Job O, which was started and completed during the current period, shows charges of $6,850 for direct materials, $10,300 for direct labor, and $6,710 for overhead on its job cost sheet. Job O, which is still in process at year-end, shows charges of $3,500 for direct materials and $5,800 for direct labor. a. Should any overhead cost be applied to Job O at year-end? b. How much overhead cost should be applied to Job O? I want solution for both part

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 8PB: Queen Bees Honey, Inc., estimated its annual overhead to be $110,000 and based its predetermined...

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Queen Bees Honey, Inc., estimated its annual overhead to be $110,000 and based its predetermined overhead rate on 27,500 direct labor hours. At the end of the year, actual overhead was $106,000 and the total direct labor hours were 29,000. What is the entry to dispose of the over applied or under applied overhead?
Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.
Coops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate on 24,286 direct labor hours. At the end of the year, actual overhead was $90,000 and the total direct labor hours were 24,100. What is the entry to dispose of the over applied or under applied overhead?
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Compute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided: Actual results reported by department and product during the year are as follows: Required: 1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product. 2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product. 3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm? 4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?
When direct labor hours for Job 101 are 30 and the predetermined factory overhead rate is 5/direct labor hour, what is the applied factory overhead amount? (a) 250 (b) 500 (c) 150 (d) It cannot be determined.
Pocono Cement Forms expects $900,000 in overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 60,000 or its expected machine hours of 30,000. Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 90 direct labor hours, and 75 machine hours. Wages are paid at $16 per hour.
Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: The average shop direct labor rate is 37.50 per hour. Determine the predetermined shop overhead rate per direct labor hour.
Luna Manufacturing Inc. completed Job 2525 on May 31, and there were no jobs in process in the plant. Prior to June 1, the predetermined overhead application rate for June was computed from the following data, based on an estimate of 5,000 direct labor hours: The factory has one production department and uses the direct labor hour method to apply factory overhead. Three jobs are started during the month, and postings are made daily to the job cost sheets from the materials requisitions and labor-time records. The following schedule shows the jobs and amounts posted to the job cost sheets: The factory overhead control account was debited during the month for actual factory overhead expenses of 27,000. On June 11, Job 2526 was completed and delivered to the customer using a mark-on percentage of 50% on manufacturing cost. On June 24, Job 2527 was completed and transferred to Finished Goods. On June 30, Job 2528 was still in process. Required: 1. Prepare job cost sheets for Jobs 2526, 2527, and 2528, including factory overhead applied when the job was completed or at the end of the month for partially completed jobs. 2. Prepare journal entries as of June 30 for the following: a. Applying factory overhead to production. b. Closing the applied factory overhead account. c. Closing the factory overhead account. d. Transferring the cost of the completed jobs to finished goods. e. Recording the cost of the sale and the sale of Job 2526.