Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company'spredetermined overhead rate of $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturingoverhead for an estimated activity level of 89,000 machine-hours.Required:1. Assume that during the year the company works only 84,000 machine-hours and incurs the following costs in the ManufacturingOverhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the yearand make the entry in your T-accounts.2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your ManufacturingOverhead T-account.2B. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.Complete this question by entering your answers in the tabs below.Req 1Req 2AReq 2BCompute the amount of underapplied or overapplied overhead for the year and show the balance in your ManufacturingOverhead T-account from Req 1.Underappliedmanufacturing overhead$14,000< Req 1Req 2B >

To solve this problem, we need to follow these steps:1. Compute the amount of overhead cost applied…

Answered: Harwood Company uses a job-order…

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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Similar questions

Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
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?
A company has the following information relating to its production costs: Compute the actual and applied overhead using the companys predetermined overhead rate of $23.92 per machine hour. Was the overhead over applied or under applied, and by how much?
Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.
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?
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?
Abbey Products Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, 60,000; estimated materials costs, 50,000; estimated direct labor costs, 60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for November was 80,000, and the production statistics on November 30 are as follows: Required: 1. Compute the predetermined rate, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why?
Barnes Company uses a job order cost system. The following data summarize the operations related to production for October: a. Materials purchased on account, 315,500. b. Materials requisitioned, 290,100, of which 8,150 was for general factory use. c. Factory labor used, 489,500 of which 34,200 was indirect. d. Other costs incurred on account for factory overhead, 600,000; selling expenses, 150,000; and administrative expenses, 100,000. e. Prepaid expenses expired for factory overhead were 18,000; for selling expenses, 6,000; and for administrative expenses, 5,000. f. Depreciation of office building was 30,000; of office equipment, 7,500; and of factory equipment, 60,000. g. Factory overhead costs applied to jobs, 711,600. h. Jobs completed, 1,425,000. i. Cost of goods sold, 1,380,000. Instructions Journalize the entries to record the summarized operations.
Ripley, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. Required: 1. What was the predetermined overhead rate? 2. What was the applied overhead for last year? 3. Was overhead over- or underapplied, and by how much? 4. What was the total cost per unit produced (carry your answer to four significant digits)?
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product 8 utilized 1,100 hours, what was the total amount of overhead assigned to the products? A. $35000 B. $30.800 C. $37,800 D. $68,600
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?

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