No WRONG ANSWER Armour, Inc., an advertising agency, appliesoverhead to jobs on the basis of direct professionallabor hours. Overhead was estimated to be$226,000, direct professional labor hours wereestimated to be 28,000, and direct professionallabor cost was projected to be $425,000. During theyear, Armour incurred actual overhead costs of$205,200, actual direct professional labor hours of23,900, and actual direct labor costs of $333,000.By year-end, the firm's overhead was

Concept of Predetermined Overhead RatePredetermined Overhead Rate is the estimated rate used to…

Answered: Armour, Inc., an advertising agency,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 2PB: Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500...

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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?
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.
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?
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?
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.
Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?
Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $152,00o0, direct professional labor hours were estimated to be 19,000, and direct professional labor cost was projected to be $285,000. During the year, Media incurred actual overhead costs of $149,300, actual direct professional labor hours of 18,500, and actual direct labor cost of S279,000. By year-end, the firm's overhead was: $1300 underapplied. $1.300 overapplied. $2700 underapplied. $2,700 overapplied. $4,000 underapplied.
Wabash Products uses a job costing system and applies overhead based on direct labor cost. Last year, manufacturing overhead was expected to be $2,829,000 and direct labor cost was estimated to be $1,150,000 (40,600 direct-labor hours). Actual manufacturing overhead amounted to $2,958,000 and direct labor cost was $1,250,000 (42,800 direct-labor hours). Wabash allocates an over- or underapplied overhead to the three accounts-Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold-based on those account balances. At the end of the year, the total amount in the three accounts (Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold) was $5.90 million before any allocation. As a part of the process, you learn that Wabash allocated $102,960 to Cost of Goods Sold. Required: What will Wabash report as Cost of Goods Sold for the year? Cost of Goods Sold $ 5,797,040
Chance Consulting, a consulting firm, specializes in advising companies on creating business plans. Chance Consulting uses a job cost system with a predetermined indirect cost allocation rate computed as a percentage of expected direct labor costs. At the beginning of the year, managing partner Sarah Chance prepared the following plan, or budget, for the year: Direct labor hours (professionals) 19,000 hours Direct labor costs (professionals) $2,650,000 Office rent $260,000 Support Staff Salaries $870,000 Utilities $340,000 Juda Resources is inviting several consulting firms to bid for work. Chance estimates that this job will require about 220 direct labor hours. Compute Chance Consulting’s hourly direct labor cost rate and their indirect cost allocation rate What is the estimate cost for the Juda Resources Consulting Contract? If Chance Consulting wants to earn a profit that equals 35% of the job’s cost, how much should the company bid…
Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has four public relations specialists and office staff. At the beginning of the year, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,300 and a total of 7,200 billable hours for the year. The office and administrative costs were estimated at $676,000. What direct labor rate would Fogelin use for the cost of its specialists? (Round your answer to the nearest cent.)
Provide correct solution and accounting
Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $3,960,000 (180,000 hours at $22/hour) and that factory overhead would be $1,480,000 for the current period. At the end of the period, the records show that there had been 160,000 hours of direct labor and $1,180,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?

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