Application of Factory Overhead Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor-hours. The company’s factory overhead budget for 2010 included the followinRg estimates: 4-34 Application of Factory Overhead Tomek Company uses a job costing system that applies factoryoverhead on the basis of direct labor-hours. The company's factory overhead budget for 2010 includedthe following estimates:Budgeted total factory overheadBudgeted total direct labor-hours$568,00071,000Chapter 4 Job Costing 113At the end of the year, the company shows these results:$582,25071,500Actual factory overheadActual direct labor-hoursThe following amounts of the year's applied factory overhead remained in the various manufacturingaccounts:Applied Factory OverheadWork-in-process inventoryFinished goods inventoryCost of goods sold$139,000216,840200,160Required1. Compute the firm's predetermined factory overhead rate for 2010.2. Calculate the amount of overapplied or underapplied overhead.3. Prepare a journal entry to transfer the underapplied or overapplied overhead to the Cost of Goods Soldaccount (do not use proration).

A job costing system seems to be the way of gathering data about the expenses associated with a…

Application of Factory Overhead Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor-hours. The company’s factory overhead budget for 2010 included the followinRg estimate

Application of Factory Overhead Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor-hours. The company’s factory overhead budget for 2010 included the followinRg estimate

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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Under Lamar Company's job costing system, manufacturing overhead is applied to Work-in-Process Inventory using a predetermined overhead rate. During June, Lamar's transactions included the following: Direct materials issued to production $ 91,700 Indirect materials issued to production 9,700 Manufacturing overhead cost incurred 126,700 Manufacturing overhead cost applied 114,700 Direct labor cost incurred 108,700 Lamar Company had no beginning or ending inventories. What was the cost of goods manufactured for June? (CMA adapted)
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Lifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage hauled to the landfill. At the beginning of the current year, management made the following budget estimates to determine overhead application rates. Annual Estimates Direct labor Manufacturing overhead Direct labor hours Tons of Debris 1 Job no. 652 (8,348 square-feet): Cost of material used on job Direct labor cost Direct labor hours Tons of debris Installation Disposal $750,000 $120,000 $100,000 $36,000 25,000 10,000 300 Job #652 for Bees Grocery measured 8,348 square-feet. The job was started and completed in May. Information pertaining to this project is provided below. Installation Disposal $30,000 $1,000 $7,800 $1,100 250 0 80 7 c. Prepare the journal entries required to record…
The following information is available for ADT Company, which produces special-order security products and uses a job order costing system. Overhead is applied using a predetermined overhead rate of 55% of direct labor cost. Inventories Raw materials -Work in process Finished goods Cost incurred for the period Raw materials purchases Factory payroll Factory overhead (actual) Indirect materials used Indirect labor used Other overhead costs 1. Raw materials purchases for cash. 2. Direct materials used. 3. Indirect materials used. View transaction list Beginning of period $ 40,000 9,400 56,000 Journal entry worksheet A Prepare journal entries for the above transactions for the period. B C Transaction 1 Note: Enter debits before credits. End of Period $ 50,000 20,600 34,000 $ 183,000 150,000 11,000 34,500 91,000 Record the raw material purchases for cash. General Journal Debit Credit
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Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company's Work in Process Inventory account for the month of June: Debits to account: Balance, June 1 Direct materials Direct labor Manufacturing overhead (applied to jobs as 125% of direct labor cost) Total debits to account Credits to account: Transferred to Finished Goods Inventory account Balance, June 30 Required: $ 5,000 18,000 12,100 15,125 $ 50,225 44,000 $ 6,225 a. Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $1,500, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30. b. Prepare general journal entries to summarize: 1. The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June. 2. The transfer of…
XYZ Company uses a job costing system and applies manufacturing overhead using a predetermined overhead rate based on direct labor hours. Information for the current year is as follows: Estimated manufacturing overhead OMR65,000; Actual manufacturing overhead OMR63,000; Estimated direct labor hours 20,000; Actual direct labor hours 22,000. The amount of over- or underapplied overhead for the year was Select one: O a. OMR2,000 overapplied O b. OMR2,000 underapplied c. None of the answers given d. OMRZ500 overapplied e. OMR8,500 underapplied 1 OMR8,500 overapplied
Accounting
XYZ Company has two production departments, Machining and Customizing. The company uses job - order costing system and computes a predetermined overhead rate (POHR) in eld department. The Machining Department's POHR is based on machine hours (Mhes) and the Customizing Department's POHR is based on direct labor - hours (DLH). At the beginning of the current year the company estimated the following yearly Mhrs and DLH to be used in each department 20,000 Mhrs and 15,000 DLH in the Marching Department 10,000 Mhes and 25,000 DLH in the Customizing Department. The company also estimated the yearly total manufacturing overhead cost in each department OMR150,000 in the Machining Department and OMR100.000 in the Customizing Department. During the year Job XY incurred the following number of hours in each department 50 Mhrs and 30 DLH in the Machining Department and 80 Mhrs and 50 DUA Customizing Department What is the total amount of manufacturing overhead that should? be applied to lob…
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Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance The chief cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $3,000,000 and total direct labor costs would be $2,400,000. During May, the actual direct labor cost totaled $198,400 and factory overhead cost incurred totaled $253,200. a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals. Identify the activity base for this company. Remember to enter the number as a whole percent not in decimals. b. Journalize the entry to apply factory overhead to production for May. Work in Process-Blending Department Factory Overhead-Blending Department Feedback Recall how the predetermined factory overhead is applied to departments. How does the…
The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. Inventories Raw materials Work in process Finished goods Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost Compute the following amounts for the month of May using T-accounts. 1. Cost of direct materials used. 2. Cost of direct labor used. 3. Cost of goods manufactured. 4. Cost of goods sold.* 5. Gross profit. 6. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead. Raw Materials (RM) 0 Finished Goods (FG) Inventory April 30 $42,000 9,300 61,000 LA May 31 34,000 19,700 33,900 193,000 250,000 8,000 57,500 118,500 1,500,000 55% Work in Process (WIP) 0 Factory Overhead