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In December 2020, Prime Manufacturing established its predetermined overhead rate for jobs produced during 2021 by using the following cost predictions: overhead costs of $750,000, and direct materials costs of $400,000. At year-end 2021, the company's records show that actual overhead costs for the year are $1,000,000. Actual direct material cost had been assigned to jobs as follows: Description Jobs completed and sold Amount $450,000 Jobs in finished goods inventory $100,000 Jobs in work in process inventory $70,000 Total actual direct materials cost $460,000 Determine the predetermined overhead rate for 2021.

In December 2020, Prime Manufacturing established its predetermined overhead rate for jobs produced during 2021 by using the following cost predictions: overhead costs of $750,000, and direct materials costs of $400,000. At year-end 2021, the company's records show that actual overhead costs for the year are $1,000,000. Actual direct material cost had been assigned to jobs as follows: Description Jobs completed and sold Amount $450,000 Jobs in finished goods inventory $100,000 Jobs in work in process inventory $70,000 Total actual direct materials cost $460,000 Determine the predetermined overhead rate for 2021.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...
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In December 2020, Prime Manufacturing established its predetermined overhead rate for jobs produced during 2021 by using the following cost predictions: overhead costs of $750,000, and direct materials costs of $400,000. At year-end 2021, the company's records show that actual overhead costs for the year are $1,000,000. Actual direct material cost had been assigned to jobs as follows: Description Jobs completed and sold Amount $450,000 Jobs in finished goods inventory $100,000 Jobs in work in process inventory $70,000 Total actual direct materials cost $460,000 Determine the predetermined overhead rate for 2021.
Transcribed Image Text:In December 2020, Prime Manufacturing established its predetermined overhead rate for jobs produced during 2021 by using the following cost predictions: overhead costs of $750,000, and direct materials costs of $400,000. At year-end 2021, the company's records show that actual overhead costs for the year are $1,000,000. Actual direct material cost had been assigned to jobs as follows: Description Jobs completed and sold Amount $450,000 Jobs in finished goods inventory $100,000 Jobs in work in process inventory $70,000 Total actual direct materials cost $460,000 Determine the predetermined overhead rate for 2021.
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