In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following cost predictions: overhead costs, $750,000, and direct materials costs, $625,000. At year-end 2017, the company's records show that actual overhead costs for the year are $830,000. Actual direct material cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory Total actual direct materials cost 1. Determine the predetermined overhead rate for 2017. 2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 2 and 3 Req 1 Req 4 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. View journal entry worksheet View transaction list No 1 $513,750 102,750 68,500 $685,000 Date Dec 31 Cost of goods sold Factory overhead General Journal Debit 8,000 Credit peng 8,000 Pamat
In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following cost predictions: overhead costs, $750,000, and direct materials costs, $625,000. At year-end 2017, the company's records show that actual overhead costs for the year are $830,000. Actual direct material cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory Total actual direct materials cost 1. Determine the predetermined overhead rate for 2017. 2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 2 and 3 Req 1 Req 4 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. View journal entry worksheet View transaction list No 1 $513,750 102,750 68,500 $685,000 Date Dec 31 Cost of goods sold Factory overhead General Journal Debit 8,000 Credit peng 8,000 Pamat
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Transcribed Image Text:In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following
cost predictions: overhead costs, $750,000, and direct materials costs, $625,000. At year-end 2017, the company's records show that
actual overhead costs for the year are $830,000. Actual direct material cost had been assigned to jobs as follows.
Jobs completed and soldi
Jobs in finished goods inventory
Jobs in work in process inventory
Total actual direct materials cost
1. Determine the predetermined overhead rate for 2017.
2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and
determine whether overhead is overapplied or underapplied.
4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Complete this question by entering your answers in the tabs below.
View transaction list
Req 1
Req 2 and 3
Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
View journal entry worksheet
No
1
$513,750
102,750
68,500
$685,000
Req 4
Date
Dec 31
Cost of goods sold
Factory overhead
General Journal
Debit
8,000
Credit
peng
8,000
fa
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