Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and appliesmanufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a costformula that estimates $1,068,000 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours.During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in thecompany's warehouse. The company's cost records revealed the following actual cost and operating data for the year:Machine-hoursManufacturing overhead costInventories at year-end:Raw materialsWork in process (includes overhead applied of $44,400)Finished goods (includes overhead applied of $150,960)Cost of goods sold (includes overhead applied of $692,640)Required:1. Compute the predetermined overhead rate used by the company during the year.2. Is Manufacturing Overhead underapplied or overapplied for the year?3. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account.Complete this question by entering your answers in the tabs below.Required 374,000$ 759,000Required 1$ 10,000$ 91,000$ 309,400$ 1,419,600Required 1 Required 2Compute the predetermined overhead rate used by the company during the year.Predetermined overhead rateper hourRequired 2

Name: Luzadis Company makes furniture using the latest automated technology
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Description: Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and appliesmanufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a costf

The overhead is applied to the production on the basis of the pre-determind overhead rate. The…

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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,068,000 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Machine-hours Manufacturing overhead cost Inventories at year-end: 74,000 $ 759,000 Raw materials Work in process (includes overhead applied of $44,400) Finished goods (includes overhead applied of $150,960) Cost of goods sold (includes overhead applied of $692,640) Required: 1. Compute the predetermined overhead rate used by the company during the year. 2. Is Manufacturing Overhead underapplied or overapplied for the year? 3. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. $ 10,000 $ 91,000 $ 309,400 $ 1,419,600

Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,068,000 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Machine-hours Manufacturing overhead cost Inventories at year-end: 74,000 $ 759,000 Raw materials Work in process (includes overhead applied of $44,400) Finished goods (includes overhead applied of $150,960) Cost of goods sold (includes overhead applied of $692,640) Required: 1. Compute the predetermined overhead rate used by the company during the year. 2. Is Manufacturing Overhead underapplied or overapplied for the year? 3. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. $ 10,000 $ 91,000 $ 309,400 $ 1,419,600

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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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products based on machine-hours. The predetermined overhead rate was based on a cost formula that estimates $900,000 of total manufacturing overhead for an estimated activity level of 75,000 machine-hours. During the year, a large quantity of furniture on the market caused Luzadis to cut production and build inventories. The company provided the following data for the year: Machine-hours Manufacturing overhead cost Inventories at year-end: 60,000 $ 850,000 Raw materials Work in process (includes overhead applied of $36,000) Finished goods (includes overhead applied of $180,000) Cost of goods sold (includes overhead applied of $504,000) Required: 1. Compute the underapplied or overapplied overhead. 2. Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3.…
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Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year-Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period's estimated level of production. Sweeten also estimated $26,200 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Estimated total machine-hours used Molding Fabrication 2,500 Estimated total fixed manufacturing overhead 1,500 $ 15,450 $ 2.50 $ 10,750 $ 1.70…
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