Required: Compute the over or under-applied factory overhead for the year 1. Assuming the plant-wide overhead rate is used2. Assuming the departmental overhead rates are used Harold Corp uses the job order costing system. Factory overhead is appliejobs on the basis of direct labor cost. The following estimates are made atProblem 3 Predetermined Factory OverheadapplieFabricating Machining Assembly300,0001,200,000beginning of the year:Total600,0001,050,000900,000270,0001,800,0002,520,000Direct LaborFactory Overhead280 The following are the cost required by each department.allowing are the cost required by each department.Fabricating9,0008,400Machining AssemblyDirect MaterialsDirect LaborFactory OverheadTotal13,80028,5006004,20018,6001,500the end of the year, the following are the actual cost data relating to all jobsprocessed during the year:Fabricating Machining570,000630,0001,080,000Assembly342,000786,000252,000TotalDirect MaterialsDirect Labor48,000324,0001,260,000(60,0001,740,0002,592,000Factory Overheadcompany uses plant-wide overhead rate to apply the factory overhead costto jobs.The

jobs on the basis of direct labor cost. The following estimates are made at Harold Corp uses the job order costing system. Factory overhead is applie Problem beginning of the year: Fabricating Machining Assembly 300,000 Total 900,000 600,000 1,050,000 1,800,000 2,520,000 Direct Labor 1,200,000 270,000 Factory Overhead 280

jobs on the basis of direct labor cost. The following estimates are made at Harold Corp uses the job order costing system. Factory overhead is applie Problem beginning of the year: Fabricating Machining Assembly 300,000 Total 900,000 600,000 1,050,000 1,800,000 2,520,000 Direct Labor 1,200,000 270,000 Factory Overhead 280

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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Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Estimated total machine-hours (MHS) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Forming Customizing Total 6,000 4,000 10,000 $20,400 $ 2.50 $9,600 $30,000 $ 5.00 During the period, the company started and completed two jobs-Job C and Job L. Data concerning those two jobs follow: Job C Job L $15,500 $9,100 $22,300 $9,300 1,250 4,750 1,250 2,750 Direct materials Direct labor cost Forming machine-hours Customizing machine-hours
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Carver Company uses a plantwide overhead rate based on direct labor costs. Suppose that Carver raises its wage rate for direct labor during the year. How would that affect the overhead applied? The total cost of jobs?
Using predetermined factory overhead application rates to apply the manufacturing overhead to the products can cause the actual factory overhead to be different from the applied factory overhead. Discuss the accounting methods available for companies to dispose of the underapplied or overapplied factory overhead.
Identify the factory overheads: (i) Production foreman salaries (ii) License fees (iii) Direct expenses (iv) Production workers wages (v) Indirect factory labour (vi) Indirect raw material (vii) Depreciation showroom a) i, iv, v b) i, v, vi c) ii, iii, iv d) i, v, vii Oi, iv, V O i, v, vi O i, ii, iv i v, vii
Single Plantwide Rate and Activity-Based Costing Whirlpool Corporation (WHR) conducted an activity-based costing study of its Evansville, Indiana, plant in order to identify its most profitable products. Assume that we select three representative refrigerators (out of 333): one low-, one medium-, and one high-volume refrigerator. Additionally, we assume the following activity-base information for each of the three refrigerators: Three Representative Number of Machine Number of Number of Sales Number of Refrigerators Hours Setups Orders Units Refrigerator-Low Volume 24 14 38 160 Refrigerator-Medium Volume 225 13 88 1,500 Refrigerator-High Volume 900 120 6,000 Prior to conducting the study, the factory overhead allocation was based on a single machine hour rate. The machine hour rate was $200 per hour. After conducting the activity-based costing study, assume that three activities were used to allocate the factory overhead. The new activity rate information is assumed to be as follows:…
All the following statements about multiple predetermined overhead rates are correct , EXCEPT : a. They are calculated for each department by dividing total estimated manufacturing overhead cost by total actual units of the allocation base . b. They are calculated at the beginning of the accounting period once the actual amount of manufacturing overhead is known . c. They improve job - order costing's accuracy accounting for costs . d .All the given answers are correct . e . They are based on estimated total manufacturing overhead costs
! Required information Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Machining Designing costs Setup costs Total Cost of Pool Number of machine hours Number of design hours. Number of batches. Cost Driver $416,700 Number of machine hours 93,100 Number of design hours 73,338 Number of batches Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Estimated Cost Driver 92,600 9,500 510 Product A Product B Product C 36,000 46,000 10,600 3,800 2,100 3,600 285 50 175
In a process cost system total costs are determined when the Job is completed. costs are summarized in a job cost sheet. only one work in process account is used. the unit cost is total manufacturing costs for the period divided by the units produced during the periad.
Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensive than that of Model B. Model B is also the more popular of the two speakers. The following data has been gathered for the two products: Units produced per year Prime costs Direct labor hours Machine hours Production runs Inspection hours Maintenance hours Overhead costs: Setup costs Inspection costs Machining Maintenance Total Model A 10,000 $153,000 144,000 17,000 30 900 9,000 $216,000 220,000 172,000 300,000 $908,000 Product Data Model B 100,000 $1,530,000 310,000 204,000 60 1,300 91,000
How to solve the factory overhead rate of 2/3 of the labor cost?
Why are some manufacturing firms switching from direct-labor hours to machine hours or throughput time as the basis for overhead application?