Exercise 4-53: To prepare journal entries for the month of July with the following CHANGES. First, assume that the company uses a plantwide overhead rate based on direct labor dollars. Also assume that estimated information for the year includes Direct labor dollars of $1,642,000. Finally, assume that the company sells its jobs at a selling price equal to (cost + 25% of cost markup). Heurion Company is a job- order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows: Overhead 789,000 direct Labor hours: 100,000 Heurion worked on five jobs in July. Data are as follows: Job 741 Job 742 Job 743 Job 744 Job 745 Balance July 1 29, 870 55,215 27,880 0 0 Direct Materials 25,500 39,800 14,450 13,600 8,420 Direct labor cost 61,300 48,500 28, 700 24, 500 21,300 direct labor hours 4,000 3400 1980 1600 1400 By July, Jobs 741 and 743 were completed and sold. The remaining jobs were in process 1. Calculate the plantwide overhead rate for Heurion Company (Note: Round to the nearest cent)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Exercise 4-53: To prepare
Heurion Company is a job- order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows:
Overhead 789,000
direct Labor hours: 100,000
Heurion worked on five jobs in July. Data are as follows:
Job 741 Job 742 Job 743 Job 744 Job 745
Balance July 1 29, 870 55,215 27,880 0 0
Direct Materials 25,500 39,800 14,450 13,600 8,420
Direct labor cost 61,300 48,500 28, 700 24, 500 21,300
direct labor hours 4,000 3400 1980 1600 1400
By July, Jobs 741 and 743 were completed and sold. The remaining jobs were in process
1. Calculate the plantwide overhead rate for Heurion Company (Note: Round to the nearest cent)
2. Prepare
3. Calculate the balance in Work in Process on July 31
4. Calculate Cost of Goods Sold for July
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