Predetermined factory overhead rate Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: DATA Disposable supplies $413, 200 Depreciation expense 103, 400 Utilities 44,100 Nurse salaries 384, 200 Technician wages 175, 100 Total operating room overhead $1, 120,000 The overhead costs will be assigned to procedures, based on the number of surgical room hours. The number of hours per day and days per week that Poehling Medical Center expects to use the operating room and the number of weeks per year for general repairs are provided

Predetermined factory overhead rate Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: DATA Disposable supplies $413, 200 Depreciation expense 103, 400 Utilities 44,100 Nurse salaries 384, 200 Technician wages 175, 100 Total operating room overhead $1, 120,000 The overhead costs will be assigned to procedures, based on the number of surgical room hours. The number of hours per day and days per week that Poehling Medical Center expects to use the operating room and the number of weeks per year for general repairs are provided

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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Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $180,000, and budgeted direct labor hours were 18,000. The average wage rate for direct labor is expected to be $20 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $25,500 $34,100 $17,600 $800 Materials requisitioned 16,900 20,400 8,500 13,000 Direct labor cost 8,000 17,500 3,150 3,900 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 120 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs…
Predetermined Factory Overhead Rate Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies Depreciation expense Utilities Nurse salaries $316,000 57,000 33,200 474,500 155,300 $1,036,000 Technician wages Total operating room overhead The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. a. Determine the predetermined operating room overhead rate for the year. $ per hour b. Bill…
Calculating Activity-Based Costing Overhead Rates Assume that manufacturing overhead for Glassman Company consisted of the following activities and costs: Setup (1,000 setup hours) $148,000 Production scheduling (400 batches) 64,000 Production engineering (60 change orders) 120,000 Supervision (2,000 direct labor hours) 56,000 Machine maintenance (12,000 machine hours) 84,000 Total activity costs $472,000 The following additional data were provided for Job 845 Direct materials costs $8,000 Direct labor cost (5 Milling direct labor hours; 35 Finishing direct labor hours) $2,000 Setup hours 5 hours Production scheduling 1 batch Machine hours used (25 Milling machine hours; 5 Finishing machine hours) 30 hours Production engineering 3 change orders a. Calculate the cost per unit of activity driver for each activity cost category. Setup Production scheduling cost Production engineering cost Supervision cost Machine…
redetermined Factory Overhead Rate Street Runner Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts $637,100 Shop direct labor 465,000 Shop and repair equipment depreciation 51,100 Shop supervisor salaries 142,000 Shop property taxes 25,800 Shop supplies 19,800 Advertising expense 12,700 Administrative office salaries 54,800 Administrative office depreciation expense 7,000 Total costs and expenses $1,415,300 The average shop direct labor rate is $15 per hour. Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.$ per direct labor hour
Predetermined Factory Overhead Rate Street Runner Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts $949,400 Shop direct labor 693,000 Shop and repair equipment depreciation 59,300 Shop supervisor salaries 164,900 Shop property taxes 29,900 Shop supplies 23,100 Advertising expense 19,000 Administrative office salaries 81,600 Administrative office depreciation expense 10,400 Total costs and expenses $2,030,600 The average shop direct labor rate is $21 per hour. Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent. per direct labor hour
Predetermined Factory Overhead Rate Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies $196,400 Depreciation expense 35,400 Utilities 20,600 Nurse salaries 295,000 Technician wages 96,600 Total operating room overhead $644,000 The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. a. Determine the predetermined operating room overhead rate for the year.$fill…
Applying factory overhead Instructions Chart of Accounts Factory Overhead Journal Instructions Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,0000. Required: a. For Bergan Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. If required, round your answer to two decimal places. b. During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. c. Prepare the journal entry on May 31 to apply factory overhead to both jobs in May according to the predetermined overhead rate, Refer to the chart accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal…
Cost of Services Sold Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Direct materials Direct labor Variable overhead Fixed overhead ? $472,500 15,000 18,000 Next year, HHH expects to purchase $25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: Direct Materials Inventory Required: Beginning $4,000 2,600 Ending There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. 1. Prepare a statement of cost of services sold in good form. If an amount is zero, enter "0". Happy Home Helpers, Inc. Statement of Cost of Services Sold For the Coming Year 2. How does this cost of services sold…
Entries for Materlals GenX Furnishings manufactures designer furniture. GenX Furnishings uses a job order cost system. Balances on June 1 from the materials ledger are as follows: Fabric $40,500 Polyester filling 28,600 Lumber 62,400 Glue 6,550 The materials purchased during June are summarized from the receiving reports as follows: Fabric $440,000 Polyester filling 180,000 Lumber 360,000 Glue 40,000 Materials were requisitioned to individual jobs as follows: Polyester Fabric Filling Lumber Glue Total Dob 601 $205,000 $75,000 $120,000 $400,000 Dob 602 110,000 36,000 88,000 234,000 Dob 603 130,000 55,000 125,000 310,000 Factory overhead-indirect materials $34,800 34,800 Total $445,000 $166,000 $333,000 $34,800 $978,800 The glue is not a significant cost, so it is treated as indirect materials (factory overhead). a. Journalize the entry to record the purchase of materials in June. Materials a. Accounts Payable b. Journalize the entry to record the requisition of materials in June. If an…
Direct Materials Used, Cost of Goods Manufactured In September, Lauren Ashley Company purchased materials costing $200,000 and incurred direct labor cost of $120,000. Overhead totaled $325,000 for the month. Information on inventories was as follows: Materials Work in process Finished goods Required: September 1 September 30 $120,000 80,000 70,000 $130,000 90,000 65,000 Download Excel spreadsheet 1. What was the cost of direct materials used in September? 2. What was the total manufacturing cost in September? 3. What was the cost of goods manufactured for September? 4. Assume that Lauren Ashley Company's monthly incurred direct labor cost increased by 25% and total overhead costs decreased by 20%. Using Excel (or some other spreadsheet software tool), calculate Lauren Ashely's new cost of goods manufactured that results from the changes in direct labor cost and overhead costs. Even for a relatively simple exercise, this requirement illustrates the time and effort savings of utilizing…
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