JIT manufacturing company operates a job order costing system and applies overheadcost to job on the basis of machine hours. Its predetermined overhead rate was basedon a cost formula that estimated $92,000 of manufacturing overhead for an estimatedallocation base of 36,800 machine hours. The company has provided the followingactual data for the year:Purchase of raw material$80,000Direct labor cost$61,000Actual manufacturing overhead costs, including indirect$74,000material of $5,000Machine hours33,600 hoursBeginningEndingInventories:Raw materials$19,000$15,000Work in progress$38,000$26,000Finished goods$43,000$28,000Required:a) Compute the predetermined overhead rate for the year and compute the amount ofunderapplied or overapplied overhead for the year.b) Prepare a schedule of cost of goods manufactured for the year.c) Prepare the journal entry to adjust the underapplied or overhead and also a scheduleof cost of goods sold for the year.d) For one of the jobs in January, it had used direct material of $4,000 and directlabor of $6,000. It has spent 300 machine hours. How much is the price of the jobif the usual markup percentage on total costs is 30%?

Predetermined overhead rate= $92,00036,800= $2.50 per machine hour Thus, the predetermined overhead…

Answered: JIT manufacturing company operates a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Landen Corporation uses job - order costing. At the beginning of the year, it made the following estimates: Direct labor - hours required to support estimated production 140,000 Machine - hours required to support estimated production 70, 000 Fixed manufacturing overhead cost $ 784,000 Variable manufacturing overhead cost per direct labor-hour $ 2.00 Variable manufacturing overhead cost per machine - hour $ 4.00 During the year, Job 550 was started and completed. The following information pertains to this job: Direct materials $ 175 Direct labor cost $ 225 Direct labor-hours 15 Machine - hours 5 Required: Assume Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach: Compute the plantwide predetermined overhead rate. Compute the total manufacturing cost of Job 550. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? Assume Landen's…
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At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $840,000, and direct materials costs, $600,000. At year-end, the company's records show that actual overhead costs for the year are $691,300. Actual direct materials cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory $360,000 76,000 51,000 Total actual direct materials cost $487,000 1. Determine the predetermined overhead rate. es 2&3. Enter the overhead costs incurred and the amounts applied to jobs 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 1 Req 2 and 3 Req 4 Enter the overhead costs incurred and the amounts applied…

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