Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost Is applied on the basis of standard direct labor-hours. The budgeted variable manufacturing overhead Is $5.20 per direct labor-hour and the budgeted fixed manufacturing overhead Is $2,484,000 per year. The standard quantity of materials Is 4 pounds per unit and the standard cost Is $1.00 per pound. The standard direct labor-hours per unit Is 1.5 hours and the standard labor rate Is $13.60 per hour. The company planned to operate at a denominator activity level of 270,000 direct labor-hours and to produce 180,000 units of product during the most recent year. Actual activity and costs for the year were as follows: Actual number of units produced Actual direct labor-hours worked Actual variable manufacturing overhead cost incurred Actual fixed manufacturing overhead cost incurred 216,000 a51, 000 $1,053,000 $2,808,000 Required: 1. Compute the predetermined overhead rate for the year. Break the rate down Into varlable and fixed elements. 2 Prepare a standard cost card for the company's product. 3a. Compute the standard direct labor-hours allowed for the year's production. 3b. Complete the following Manufacturing Overhead T-account for the year. 4. Determine the reason for any underapplied or overapplied overhead for the year by computing the varlable overhead rate and efficlency varlances and the fixed overhead budget and volume varlances. Complete this question by entering your answers in the tabs below. Req 1 Regl2 Reg 3A Req 38 Reg 4 Prepare a standard cost card for the company's product. (Round your answers to 2 decimal places.)
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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