Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to operations for the year: Budgeted operating overhead $1,162,560 Actual operating overhead $1,149,400 Budgeted net realizable value of recycled paper $25,760 Actual net realizable value of recycled paper $27,160 Budgeted billable hours 196,000 Actual billable hours 198,520 a. Assuming that number of billable hours is the allocation base, what was the company’s predetermined overhead rate? $Answer b. Record the journal entry for the sale of the recycled paper. Account Debit Credit Answer Answer Answer Answer Answer Answer To record sale of by-product c. What was the company’s underapplied or overapplied overhead for the year? Note: Do not use a negative sign with your answer. $Answer Answer
Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to operations for the year: Budgeted operating overhead $1,162,560 Actual operating overhead $1,149,400 Budgeted net realizable value of recycled paper $25,760 Actual net realizable value of recycled paper $27,160 Budgeted billable hours 196,000 Actual billable hours 198,520 a. Assuming that number of billable hours is the allocation base, what was the company’s predetermined overhead rate? $Answer b. Record the journal entry for the sale of the recycled paper. Account Debit Credit Answer Answer Answer Answer Answer Answer To record sale of by-product c. What was the company’s underapplied or overapplied overhead for the year? Note: Do not use a negative sign with your answer. $Answer Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accounting for scrap
Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating
| Budgeted operating overhead | $1,162,560 |
| Actual operating overhead | $1,149,400 |
| Budgeted net realizable value of recycled paper | $25,760 |
| Actual net realizable value of recycled paper | $27,160 |
| Budgeted billable hours | 196,000 |
| Actual billable hours | 198,520 |
a. Assuming that number of billable hours is the allocation base, what was the company’s predetermined overhead rate? $Answer
b. Record the
| Account | Debit | Credit |
|---|---|---|
| Answer | Answer | Answer |
| Answer | Answer | Answer |
To record sale of by-product
c. What was the company’s underapplied or overapplied overhead for the year?
Note: Do not use a negative sign with your answer.
$Answer Answer
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