Please answer the last subpart, number 4 (highlighted in red) 1. Prepare the statement of cost of goods manufactured for the year.Statement of cost of goods manufactured:Direct materialBeginning materialRaw material purchaseRaw material available for useLess; Ending raw materialRaw material used in productionDirect laborApplied overheadTotal manufacturing costBeginning work in processTotal cost of work in processLess; Ending work in processCost of goods manufactured$20,000$510,000$530,000-$80,000$450,000$90,000$720,000$1,260,000$150,000$1,410,000-$70,000$1,340,0002. Compute the Cost of Goods Sold for the year. (Do not include the under- or over-applied overhead in thecost of goods sold.) What options are available for disposing of under- or over-applied overhead?Unadjusted cost of goods sold= Beginning finished goods inventory + Cost of goods manufactured - Endingfinished goods inventory= $260000+$1340000-$400000= $1200000The under applied overhead can be adjusted by cost of goods sold.3. Job 215 was started and completed during the year. What price would have been charged to customer if thejob required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25%above the job's cost to absorb period cost as well as provide for profit?Price charged = (Direct materials + Direct labor + Manufacturing overhead)*(1+25%)= ($8500 + $2700 + $8500*160%) * ( 125%)= $310004. If direct materials made up $24,000 of the ending work in process inventory balance. How much is thedirect labor cost and the manufacturing overhead? Problem #4:Gitavo Products operates a job-order costing system and applies overhead cost to jobs on the basis of directmaterials used in production (not on the basis of raw materials purchased.) In computing a predeterminedoverhead rate at the beginning of the year, the company's estimates were: manufacturing overhead cost,$800,000; and direct materials to be used in production, $500,000. The company has provided the followingdata:Raw materialsWork in ProcessFinished GoodsManufacturing overhead costs:Indirect laborProperty taxesThe following actual costs were incurred during the year:Purchase of direct raw materialsDirect labor costDepreciation- equipmentMaintenanceInsuranceRent - BuildingBeginning$20,000= (20000+510000-80000)*1.6= $720000150,000260,000Actual overhead = $760000Under applied overhead = $760000 - $720000= $40,0005Ending$80,00070,000400,000$510,00090,000Required:1.a. Compute the predetermined overhead rate for the yearOverhead rate = Total manufacturing overhead / total direct materials used= $800000/$500000= 160% of direct material used170,00048,000260,00095,0007,000180,000b. Compute the amount of under- or over-applied overhead for the year.Direct material used during the year = Beginning raw material inventory + Raw material purchases -Ending raw material inventoryApplied overhead = Direct material used during the year * Predetermined overhead rate

Name: Please answer the last subpart, number 4 (highlighted in red) 1. Prepa
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Description: Please answer the last subpart, number 4 (highlighted in red) 1. Prepare the statement of cost of goods manufactured for the year.Statement of cost of goods manufactured:Direct materialBeginning materialRaw material purchaseRaw material available for

Predetermined Overhead Rate is the rate used to allocate manufacturing overhead cost to cost object…

Business

Accounting

Problem #4: Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased.) In computing a predetermined overhead rate at the beginning of the year, the company's estimates were: manufacturing overhead cost, $800,000; and direct materials to be used in production, $500,000. The company has provided the following data: Raw materials Work in Process Finished Goods Required: Beginning $20,000 The following actual costs were incurred during the year: Purchase of direct raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation equipment Maintenance Insurance Rent- Building 150,000 260,000 Ending $80,000 70,000 400,000 $510,000 90,000 170,000 48,000 260,000 95,000 7,000 180,000

Problem #4: Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased.) In computing a predetermined overhead rate at the beginning of the year, the company's estimates were: manufacturing overhead cost, $800,000; and direct materials to be used in production, $500,000. The company has provided the following data: Raw materials Work in Process Finished Goods Required: Beginning $20,000 The following actual costs were incurred during the year: Purchase of direct raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation equipment Maintenance Insurance Rent- Building 150,000 260,000 Ending $80,000 70,000 400,000 $510,000 90,000 170,000 48,000 260,000 95,000 7,000 180,000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 15P: The following information, taken from the books of Herman Brothers Manufacturing represents the...

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Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Compute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.
Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.
Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided: Actual results reported by department and product during the year are as follows: Required: 1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product. 2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product. 3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm? 4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?
The following information, taken from the books of Herman Brothers Manufacturing represents the operations for January: The job cost system is used, and the February cost sheet for Job M45 shows the following: The following actual information was accumulated during February: Required: 1. Using the January data, ascertain the predetermined factory overhead rates to be used during February, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead. 3. Prepare the entries to record the following for February operations: a. The liability for total factory overhead. b. Distribution of factory overhead to the departments. c. Application of factory overhead to the work in process in each department, using direct labor hours. (Use the predetermined rate calculated in Requirement 1.) d. Closing of the applied factory overhead accounts. e. Recording under- and overapplied factory overhead and closing the actual factory overhead accounts.
Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. What was last years per unit product cost? a. 1.39 b. 4.40 c. 4.43 d. 3.01
Leen Production Co. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of May: a. Compute the total production cost of each job. b. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. c. Compute the selling price per unit for each job, assuming a mark-on percentage of 40%. d. Prepare the journal entries to record the sale of Job 1065.
Gerken Fabrication Inc. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of March: a. Compute the total production cost of each job. b. Prepare the journal entries to charge the costs of materials, labor, and factory overhead to Work in Process. c. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. d. Compute the unit cost of each job. e. Compute the selling price per unit for each job, assuming a mark-on percentage of 50%.
Exotic 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: The average shop direct labor rate is 37.50 per hour. Determine the predetermined shop overhead rate per direct labor hour.
Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?
Determining job costcalculation of predetermined rate for applying overhead by direct labor cost and direct labor hour methods Beemer Products Inc. has its factory divided into three departments, with individual factory overhead rates for each department. In each department, all the operations are sufficiently alike for the department to be regarded as a cost center. The estimated monthly factory overhead for the departments is as follows: Forming, 64,000; Shaping, 36,000; and Finishing, 10,080. The estimated production data include the following: The job cost ledger shows the following data for X6, which was completed during the month: Required: Determine the cost of X6. Assume that the factory overhead is applied to production orders, based on the following: 1. Direct labor cost 2. Direct labor hours (Hint: You must first determine overhead rates for each department, rounding rates to the nearest cent.)