Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $9,500,000 (950,000 hours at $10/hour) and that factory overhead would be $6,000,000 for the current period. At the end of the period, the records show that there had been 330,000 hours of direct labor and $5,700,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate? a. $6.00 per direct labor hour. b. $6.32 per direct labor hour. c. $6.67 per direct labor hour. d. $18.20 per direct labor hour. e. $17.95 per direct labor hour.

Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $9,500,000 (950,000 hours at $10/hour) and that factory overhead would be $6,000,000 for the current period. At the end of the period, the records show that there had been 330,000 hours of direct labor and $5,700,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate? a. $6.00 per direct labor hour. b. $6.32 per direct labor hour. c. $6.67 per direct labor hour. d. $18.20 per direct labor hour. e. $17.95 per direct labor hour.

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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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?
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Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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