Predetermined Factory Overhead RateRoad Runner Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expensesfor the coming period are as follows:Engine parts$1,085,000Shop direct labor792,000Shop and repair equipment depreciation31,100Shop supervisor salaries86,400Shop property taxes15,700Shop supplies12,000Advertising expense21,700Administrative office salaries93,300Administrative office depreciation expense11,900Total costs and expenses$2,149,100The average shop direct labor rate is $24 per hour.Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.$4per direct labor hour

Shop direct labor =$792,000 Shop and repair equipment depreciation =$31,100 Shop supervisor…

Answered: Determine the predetermined shop…

Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent. per direct labor hour

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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Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensive than that of Model B. Model B is also the more popular of the two speakers. The following data has been gathered for the two products: Units produced per year Prime costs Direct labor hours Machine hours Production runs Inspection hours Maintenance hours Overhead costs: Setup costs Inspection costs Machining Maintenance Total Model A 10,000 $153,000 144,000 17,000 30 900 9,000 $216,000 220,000 172,000 300,000 $908,000 Product Data Model B 100,000 $1,530,000 310,000 204,000 60 1,300 91,000
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Jackson Foundry uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on the machine hours required. (Click the icon to view the costs.) Requirements 1. 2. 3. Compute Jackson's predetermined overhead allocation rate. Prepare the journal entry to allocate manufacturing overhead. Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. Is manufacturing overhead underallocated or overallocated? By how much? 4. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead. Does your entry increase or decrease Cost of Goods Sold? Print Allocated overhead to WIP Done - X Data table At the beginning of 2024, the company expected to incur the following: Manufacturing overhead costs Direct labor costs $880,000 1,540,000 Machine hours 80,000 hours At the end of 2024, the company had actually incurred: Direct labor costs Depreciation on manufacturing plant and equipment Property taxes on plant…
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