Problem 4.1: West Manufacturing Inc. (WMI) operates a job-order cost system and applies overhead on the basis of direct laborhours. When preparing the budget for the upcoming fiscal year, the following budget items determined: (1) overhead = $150,000,(2) direct labor hours (DLH) = 8,000 and (3) direct labor dollars (DL$) = $60,000.BeginningEndingInventoryRaw materials (RM)Work in process (WIP)Finished goods (FG)$21,000$86,000$108,000Inventory$16,000$71,500$58,000Actual results:$650,000$133,000$160,00010,000$108,000$165,500Actual salesPurchasesDirect labor $sDirect labor hoursS&AActual MOHRequired:Compute WMI's predetermined overhead rate, applied overhead, and over/under applied overhead.Compute net income using before and after the over/under applied overhead adjustment.Using the Cost Flow Worksheet, compute the inventory turnovers for each inventoryCompute cost of Job 160, where the job required direct labor of $1,200 direct labor hours (average pay rate = $12.00), anddirect material of $4,000.1.2.3.4.Page 5 of 10

Predetermined Overhead rate = Budgeted OverehadBudgeted Labor Hours Note: Since you have posted a…

Problem 4.1: West Manufacturing Inc. (WMI) operates a job-order cost system and applies overhead on the basis of direct labor hours. When preparing the budget for the upcoming fiscal year, the following budget items determined: (1) overhead = $150,000, (2) direct labor hours (DLH) = 8,000 and (3) direct labor dollars (DL$) = $60,000. 田 Raw materials (RM) Work in process (WIP) Finished goods (FG) Beginning Inventory $21,000 $86,000 $108,000 Ending Inventory $16,000 $71,500 $58,000 Actual results: Actual sales $650,000 $133,000 $160,000 Purchases Direct labor $s Direct labor hours 10,000 $108,000 $165,500 S&A Actual MOH Required: 1. Compute WMI's predetermined overhead rate, applied overhead, and over/under applied overhead. 2. Compute net income using before and after the over/under applied overhead adjustment. 3. Using the Cost Flow Worksheet, compute the inventory turnovers for each inventory 4. Compute cost of Job 160, where the job required direct labor of $1,200 direct labor hours (average pay rate = $12.00), and direct material of $4,000.

Problem 4.1: West Manufacturing Inc. (WMI) operates a job-order cost system and applies overhead on the basis of direct labor hours. When preparing the budget for the upcoming fiscal year, the following budget items determined: (1) overhead = $150,000, (2) direct labor hours (DLH) = 8,000 and (3) direct labor dollars (DL$) = $60,000. 田 Raw materials (RM) Work in process (WIP) Finished goods (FG) Beginning Inventory $21,000 $86,000 $108,000 Ending Inventory $16,000 $71,500 $58,000 Actual results: Actual sales $650,000 $133,000 $160,000 Purchases Direct labor $s Direct labor hours 10,000 $108,000 $165,500 S&A Actual MOH Required: 1. Compute WMI's predetermined overhead rate, applied overhead, and over/under applied overhead. 2. Compute net income using before and after the over/under applied overhead adjustment. 3. Using the Cost Flow Worksheet, compute the inventory turnovers for each inventory 4. Compute cost of Job 160, where the job required direct labor of $1,200 direct labor hours (average pay rate = $12.00), and direct material of $4,000.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

Problem 4.1: West Manufacturing Inc. (WMI) operates a job-order cost system and applies overhead on the basis of direct labor
hours. When preparing the budget for the upcoming fiscal year, the following budget items determined: (1) overhead = $150,000,
(2) direct labor hours (DLH) = 8,000 and (3) direct labor dollars (DL$) = $60,000.
Beginning
Ending
Inventory
Raw materials (RM)
Work in process (WIP)
Finished goods (FG)
$21,000
$86,000
$108,000
Inventory
$16,000
$71,500
$58,000
Actual results:
$650,000
$133,000
$160,000
10,000
$108,000
$165,500
Actual sales
Purchases
Direct labor $s
Direct labor hours
S&A
Actual MOH
Required:
Compute WMI's predetermined overhead rate, applied overhead, and over/under applied overhead.
Compute net income using before and after the over/under applied overhead adjustment.
Using the Cost Flow Worksheet, compute the inventory turnovers for each inventory
Compute cost of Job 160, where the job required direct labor of $1,200 direct labor hours (average pay rate = $12.00), and
direct material of $4,000.
1.
2.
3.
4.
Page 5 of 10

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