Munoz Company and Perez Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year. Actual manufacturing overhead Actual direct labor hours Underapplied overhead Overapplied overhead Munoz Company $ 172,000 25,000 $ 23,000 Perez Company $ 231,900 22,000 18,500 Required a. Compute the predetermined overhead rate for each company. b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each company, assuming the amounts are immaterial. Complete this question by entering your answers in the tabs below.

Munoz Company and Perez Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year. Actual manufacturing overhead Actual direct labor hours Underapplied overhead Overapplied overhead Munoz Company $ 172,000 25,000 $ 23,000 Perez Company $ 231,900 22,000 18,500 Required a. Compute the predetermined overhead rate for each company. b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each company, assuming the amounts are immaterial. Complete this question by entering your answers in the tabs below.

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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The Work in Process inventory account of Ninetales Publishing Inc shows a total manufacturing cost of $20,000 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $6,000 and $5,000 for materials, and charges of $2,000 and $4,000 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of %.
The Brass Works is in the process of determining manufacturing overhead. Journalize events (a) (d) to Factory Overhead, Administrative Expenses, Selling Expenses, or allocated between the three as appropriate. The insurance policy and electric bill were paid in cash at the time of acquisition. Next calculate the overhead application rate and apply overhead to Work in Process. a. Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the value of the policy protects production, the balance protects the administrative offices. Brass Works charges insurance initially to expense. If an amount box does not require an entry, leave it blank.
Ibra Computer Co. sells computers and internet equipment. It has the following information for the year: Overhead cost Computer hours Direct labor hours Estimated R.O.6,200,000 310,000 62,000 Actual R.O.4,500,000 90,000 150,000 Overhead is applied on the basis of direct labor hours. Instructions a. Compute the predetermined overhead rate. b. Determine the amount of overhead under or over-applied for the year.
Saved Blueberry Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of machine hours. For the upcoming year, Blueberry Corp. estimated total manufacturing overhead cost at $333,500 and total machine hours of 46,000. During the year actual manufacturing overhead incurred was $323,680 and 47,600 machine hours were used. (a) Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) Pdetemined Overhed Rate per hour
The Goods in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $7,200 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $3,400 and direct labor cost of $1,150. What is the company's overhead application rate?
The company uses normal costing and applies overhead on the basis of direct labor costs. The total factory cost for the period is:
The following information pertains to Thornton Manufacturing Company for March Year 3. Assume actual overhead equaled applied overhead. March 1 Inventory balances Raw materials Work in process Finished goods March 31 Inventory balances Raw materials Work in process Finished goods During March Costs of raw materials purchased Costs of direct labor Costs of manufacturing overhead Sales revenues Required A Required B Required a. Prepare a schedule of cost of goods manufactured and sold. b. Calculate the amount of gross margin on the income statement. $ 124,100 118,300 76,300 Complete this question by entering your answers in the tabs below. $ 85,400 145,700 80,500 Raw materials available for use $ 118,500 100,800 61, 600 356,000 Prepare a schedule of cost of goods manufactured and sold. Direct raw materials used THORNTON MANUFACTURING COMPANY Schedule of Cost of Goods Manufactured and Sold For March Year 3 Total manufacturing costs 0 0 0
Verizox Company uses a job order cost system with manufacturing overhead applied to products based on direct labor hours. At the beginning of the most recent year, the company estimated its manufacturing overhead cost at $181,390. Estimated direct labor cost was $460,020 for 18,700 hours. Actual costs for the most recent month are summarized here: Item Description Total Cost Direct labor (1,870 hours) $ 46,003 Indirect costs Indirect labor 2,450 Indirect materials 3,330 Factory rent 3,290 Factory supervision 4,720 Factory depreciation 5,680 Factory janitorial work 1,130 Factory insurance 1,880 General and administrative salaries 4,110 Selling expenses 5,440 Required:1. Calculate the predetermined overhead rate. 2. Calculate the amount of applied manufacturing overhead. 3. Calculate actual manufacturing overhead costs. 4. Compute over- or underapplied overhead.
A manufacturer uses job-order costing. On January 1, the company's inventory balances were as follow Raw materials Work in process Finished goods $50,500 $25,000 $38,100 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate was based on a cost formula that estimated $470,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: a. Raw materials were purchased on account, $592,000. b. Raw materials used in production, $557,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $442,000; indirect labor, $150,000; selling and administrative salaries, $295,000. d. Incurred various selling and administrative expenses (e.g, advertising, sales travel costs, and finished goods warehousing), $381,000 e. Incurred various additional…
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Answer the following questions by analysing the T-accounts given below. a) Purchases of direct material b) The cost of direct material used c) Why does direct labor account has a credit balance of $5000? Explain d) Direct labor costs assigned to production e) The overhead as a percentage of direct labor costs f) Total manufacturing costs charged to the Work in Process Inventory account during the current year g) The cost of finished goods manufactured h) The year-end balance in the Work in Process Inventory account i) The cost of goods sold j) The total amount of inventory listed in the hear-end balance sheet k) Manufacturing overhead assigned to production
The Work-in-Process Inventory account of a manufacturing firm has a balance of $3,600 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $490 and $290 for materials used, and charges of $550 and $650 for direct labor used. Overhead is applied as a percentage of direct labor costs. The predetermined rate is: