PROBLEM 3-21 Predetern Overhead [LO1, LO7] Savallas Company is highly automated and uses computers to control ng operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: Computer-hours.. Fixed manufacturing overhead cost... Variable manufacturing overhead per computer-hour. 85,000 $1,275,000 $3.00 During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company's warehouse. The company's cost records revealed the follow- ing actual cost and operating data for the year: 60,000 Computer-hours .. Manufacturing overhead cost... Inventories at year-end: Raw materials.. Work in process. Finished goods.. Cost of goods sold. $1,350,000 $400,000 $160,000 $1,040,000 $2,800,000 Required: 1. Compute the company's predetermined overhead rate for the year. 2. Compute the underapplied or overapplied overhead for the year. 3. Assume the company closes any underapplied or overapplied overhead directly to Cost of Goods Sold. Prepare the appropriate entry.

PROBLEM 3-21 Predetern Overhead [LO1, LO7] Savallas Company is highly automated and uses computers to control ng operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: Computer-hours.. Fixed manufacturing overhead cost... Variable manufacturing overhead per computer-hour. 85,000 $1,275,000 $3.00 During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company's warehouse. The company's cost records revealed the follow- ing actual cost and operating data for the year: 60,000 Computer-hours .. Manufacturing overhead cost... Inventories at year-end: Raw materials.. Work in process. Finished goods.. Cost of goods sold. $1,350,000 $400,000 $160,000 $1,040,000 $2,800,000 Required: 1. Compute the company's predetermined overhead rate for the year. 2. Compute the underapplied or overapplied overhead for the year. 3. Assume the company closes any underapplied or overapplied overhead directly to Cost of Goods Sold. Prepare the appropriate entry.

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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* 00 %24 %24 D. Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate comple Re Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Maintenance Personnel Printing Developing Machine-hours 006 3,100 Labor-hours 00E T 006 006 Department direct costs $15,200 009 $ 009'ET$ 009 Required: Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) XAnswer is not complete. Maintenance Personnel Printing Developing 3,600 X $ X 009 13,600 X Service department costs 13,600 Maintenance allocation (3,600) 13,600 X (009) Personnel allocation Total costs allocated $ 17.200 17,200 Mc Graw K…
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Exercise 7-40 (Algo) Calculating Expected Activity Using the Predetermined Overhead Rate (LO 7-3) Auduon, Incorporated uses a predetermined factory overhead rate based on machine-hours. For October, Audubon recorded $5.300 In overapplied overhead, based on 34.900 actual machine-hours worked and actual manufacturing overhead incurred of $599,517 Audubon estimated manufacturing overhead for October to be $568,424. Required: What was the estimated number of machine-hours Audubon expected in October? Note: Do not round intermediate calculations. Expected machine-hours machine-hours
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Problem 3-12 (Static) Predetermined Overhead Rate; Disposing of Underapplied or Overapplied Overhead [LO3-4] 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 $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 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 60,000 Manufacturing overhead cost $ 850,000 Inventories at year-end: Raw materials $ 30,000 Work in process (includes overhead applied of $36,000) $ 100,000 Finished goods (includes overhead applied of $180,000) $ 500,000 Cost of goods…
dational 15 - Chapter Two i 2 of 15 k Dashboard ces ChatGPT: Optimizing Language Models for Dialogue 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 $28,600 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.60 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: Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Estimated total machine-hours used Estimated total fixed manufacturing…
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QUESTION 46 A company has $10,000 under-applied overhead at the end of a given period. The following information is given: Account Ending balance Overhead applied in the accountWork-in-process $95,000 $30,000 Finished goods $85,000 $10,000 Cost of goods sold $120,000 $60,000 Manufacturing overhead control $110,000 Applied manufacturing overhead $100,000 The company uses the proration method to allocate the under-applied overhead to the above accounts. The accounting treatment to dispose of the under-applied overhead does which of the following? A. Decrease (credit) Cost of goods sold by $10,000 B. Increase (dedit) Cost of goods sold by $4,000 C. Increase (debit)…