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Manufacturing overhead is

Manufacturing overhead is

FINANCIAL ACCOUNTING
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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Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours. Required: a. For 2019, the company's cost accountant estimated that total overhead costs incurred would be $475,200 and that a total of 54,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. (Round your answer to 2 decimal places.) Predetermined overhead application rate b. A production run of 400 coffee mugs used raw materials that cost $460 and used 40 direct labor hours at a cost of $10.40 per hour. Calculate the cost of each coffee mug produced. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost per coffee mug produced c. At the end of October 2019, 320 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 2019, finished goods inventory. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Transcribed Image Text:Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours. Required: a. For 2019, the company's cost accountant estimated that total overhead costs incurred would be $475,200 and that a total of 54,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. (Round your answer to 2 decimal places.) Predetermined overhead application rate b. A production run of 400 coffee mugs used raw materials that cost $460 and used 40 direct labor hours at a cost of $10.40 per hour. Calculate the cost of each coffee mug produced. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost per coffee mug produced c. At the end of October 2019, 320 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 2019, finished goods inventory. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Predetermined overhead application rate b. A production run of 400 coffee mugs used raw materials that cost $460 and used 40 direct labor hours at a cost of $10.40 per hour. Calculate the cost of each coffee mug produced. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost per coffee mug produced c. At the end of October 2019, 320 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 2019, finished goods inventory. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Cost of coffee mugs sold Cost of coffee mugs in inventory
Transcribed Image Text:Predetermined overhead application rate b. A production run of 400 coffee mugs used raw materials that cost $460 and used 40 direct labor hours at a cost of $10.40 per hour. Calculate the cost of each coffee mug produced. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost per coffee mug produced c. At the end of October 2019, 320 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 2019, finished goods inventory. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Cost of coffee mugs sold Cost of coffee mugs in inventory
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