manufacturing overhead cost Budgeted direct manufacturing labor cost Actual manufacturing overhead cost Actual direct manufacturing labor cost $125,000 $250,000 $117,000 $228,000 Inventory balances on December 31, 2017, were as follows: 2017 direct manufacturing labor cost in ending balance Ending balance Account Work in process Finished goods Cost of goods sold $ 50,700 245,050 549,250 $ 20,520 59,280 148,200 Required 1. Calculate the manufacturing overhead allocation rate. Compute the amount of under- or overallocated manufacturing overhead. 3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overallocated manufacturing overhead is as follows: a. Written off to cost of goods sold b. Prorated based on ending balances (before proration) in each of the three accounts c. Prorated based on the overhead allocated in 2017 in the ending balances (before proration) in each of the three accounts 4. Which method would you choose? Justify your answer.

manufacturing overhead cost Budgeted direct manufacturing labor cost Actual manufacturing overhead cost Actual direct manufacturing labor cost $125,000 $250,000 $117,000 $228,000 Inventory balances on December 31, 2017, were as follows: 2017 direct manufacturing labor cost in ending balance Ending balance Account Work in process Finished goods Cost of goods sold $ 50,700 245,050 549,250 $ 20,520 59,280 148,200 Required 1. Calculate the manufacturing overhead allocation rate. Compute the amount of under- or overallocated manufacturing overhead. 3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overallocated manufacturing overhead is as follows: a. Written off to cost of goods sold b. Prorated based on ending balances (before proration) in each of the three accounts c. Prorated based on the overhead allocated in 2017 in the ending balances (before proration) in each of the three accounts 4. Which method would you choose? Justify your answer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? B. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product?
Ss.117.
Identify each of the following costs as either direct materials (DM), direct labor (DL), or factory overhead(FO). The company manufactures tennis balls. Rubber used to form the cores.
use the FIFO method to summarize the total costs to account for; calculate the cost per equivalent unit for direct materials and conversion costs; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.
Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs.
Proration of overhead with two indirect cost pools. Adventure Designs makes custom backyard play structures that it sells to dealers across the Midwest. The play structures are produced in two departments, fabrication (a mostly automated department) and custom nishing (a mostly manual department). The company uses a normal-costing system in whichoverhead in the fabrication department is allocated to jobs on the basis of machine-hours and overhead in the nishing department is allocated to jobs based on direct manufacturing labor-hours. During May, Adventure Designs reported actual overhead of $42,600 in the fabrication department and $39,800 in the nishing department. Additional information follows:
For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit.
Petrillo Company produces engine parts for large motors. The company usesa standard cost system for production costing and control. The standard costsheet for one of its higher volume products (a valve) is as follows: Direct materials (7 lbs @$5,4) $37,80 Direct labor (1,75 lbs @$18) $31,50 Variable overhead (1,75 lbs @$4) $7 Fixed overhead (1,75 lbs @$3) $5,25 Standard unit cost $81,55 During the year, Petrillo had the following activity related to valve production:a. Production of valves totaled 20,600 units.b. A total of 135,400 pounds of direct materials was purchased at $5.36per pound.c. There were 10,000 pounds of direct materials in beginning inventory(carried at $5.40 per pound). There was no ending inventory. d. The company used 36,500 direct labor hours at a total cost of $656,270.e. Actual fixed overhead totaled $110,000.f. Actual variable overhead totaled $168,000.Petrillo produces all of its valves in a single plant. Normal activity is 20,000units per year. Standard…
Problem Factory overhead rate and application. Faye Company produces electric hairdryers. Because variable overhead expense is closely related to hours worked, the company uses the direct labor hours method of applying factory overhead. The following data pertain to a recent accounting period: [IMAGE] Required: Determine the following: (1) The predetermined factory overhead rate. (2) The applied factory overhead. (3) The over- or underapplied factory overhead.
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below: Standard Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production Estimated total manufacturing overhead Estimated total direct labor-hours Deluxe $ 57.00 $15.00 The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: 0.70 DLHS 10,000 units Unit product cost Deluxe $ 45.00 $ 12.40 Required: 1. Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Complete this question by entering your answers in the tabs below.…
Crmration manufactures bwo models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Setups Components Direct Labor Hours 10 290 Preduct Standard 13 18 235 32 Delue $72,000 $95,200 Overhead costs Amnealraditional costing system applies the overhead costs based on direct labor hours. What is the total amount of overhead costs assigned to the standard model? (Do not round interim calculations. Round the final anewes ln the a whole dollar) OA S92.358 OB $74,842 OC $83,600 OD. $52.587 O Time Remaining: 01:46:06 Next % 5 6. 7. 8. ఉం W R Y 314
The Matilda produces two products, Alpha and Beta, and uses the conventional method of allocating overhead based on direct labor cost. The management decided to adopt the ABC System of costing. The number of setups and the number of design hours were selected as the activity drivers for the two new cost pools, and direct labor cost will continue as the base for allocating the remaining overhead. Information below is available. For the current period, the eatery had the following activities: 1. Using the ABC System, The total production cost for Alpha is2. Using the ABC System, The Overhead applied to Job Custom is 3. Using conventional method, the overhead assigned to Job Beta is