Production workers for Adams Manufacturing Company provided 5,000 hours of labor in January and 2,100 hours in February. Thecompany, whose operation is labor intensive, expects to use 48,000 hours of labor during the year. Adams paid a $100,800 annualpremium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months.RequiredBased on this information, how much of the insurance cost should be allocated to the products made in January and to those made inFebruary?Note: Do not round intermediate calculations.MonthJanuaryFebruaryAllocatedCost

Cost allocation can be done on various basis. For that we need to calculate allocation rate…

Answered: Production workers for Adams…

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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Production workers for Thornton Manufacturing Company provided 5,200 hours of labor in January and 3,100 hours in February. The company, whose operation is labor intensive, expects to use 48,500 hours of labor during the year. Thornton paid a $101,850 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months. Required Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.) Month Allocated Cost January February
Adams Corporation estimated its overhead costs would be $23,000 per month except for January when it pays the $179,400 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $202,400 ($179,400 + $23,000). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,900 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,850 units of product in each month except July, August, and September, in which it produced 4,950 units each month. Direct labor costs were $23.80 per unit, and direct materials costs were $11.50 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August. c. Determine…
Rooney Corporation estimated its overhead costs would be $23,200 per month except for January when it pays the $165,960 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $189,160 ($165,960 + $23,200). The company expected to use 7,600 direct labor hours per month except during July, August, and September when the company expected 9,400 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company’s actual direct labor hours were the same as the estimated hours. The company made 3,800 units of product in each month except July, August, and September, in which it produced 4,700 units each month. Direct labor costs were $23.10 per unit, and direct materials costs were $10.20 per unit. Required Calculate a predetermined overhead rate based on direct labor hours. Determine the total allocated overhead cost for January, March, and August. Determine the…
Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. Determine the over- or underapplied amount for the year. Oa. $17,500 underapplied Ob. $118,250 underapplied Oc. $17,500 overapplied Od. $118,250 overapplied
Fanning Corporation estimated its overhead costs would be $22,100 per month except for January when it pays the $207,120 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $229,220 ($207,120 + $22,100). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,700 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company’s actual direct labor hours were the same as the estimated hours. The company made 3,850 units of product in each month except July, August, and September, in which it produced 4,850 units each month. Direct labor costs were $23.10 per unit, and direct materials costs were $10.30 per unit.Required Calculate a predetermined overhead rate based on direct labor hours. Determine the total allocated overhead cost for January, March, and August. Determine the…
Fanning Corporation estimated its overhead costs would be $22,100 per month except for January when it pays the $207,120 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $229,220 ($207,120 + $22,100). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,700 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company’s actual direct labor hours were the same as the estimated hours. The company made 3,850 units of product in each month except July, August, and September, in which it produced 4,850 units each month. Direct labor costs were $23.10 per unit, and direct materials costs were $10.30 per unit.Required Calculate a predetermined overhead rate based on direct labor hours. Determine the total allocated overhead cost for January, March, and August. Determine the…
Walton Corporation estimated its overhead costs would be $23,400 per month except for January when it pays the $135,870 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $159,270 ($135,870 + $23,400). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,800 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,750 units of product in each month except July, August, and September, in which it produced 4,900 units each month. Direct labor costs were $24.90 per unit, and direct materials costs were $11.10 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August. c. Determine…
Gibson Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $135,240 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $158,840 ($135,240+ $23,600). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,200 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,750 units of product in each month except July, August, and September, in which it produced 4,600 units each month. Direct labor costs were $23.40 per unit, and direct materials costs were $11.40 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August c. Determine…
Cavy Company estimates that the factory overhead for the following year will be $1,788,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 29,800 hours. The machine hours for the month of April for all of the jobs were 4,770. If the actual factory overhead for April totaled $280,190, determine the over- or underapplied amount for the month. Enter the amount as a positive number.
Do-Over Incorporated recently obtained a short-term bank loan from City National Bank. The bank required that certain credit information and pro forma financial statements be maintained through the life of the loan. In order to prepare the pro forma statements, Do-Over must forecast total overhead cost. The actual machine hours and overhead cost are presented for the past six months. Using the high-low method, total monthly fixed overhead cost is calculated to be:
Winston Company estimates that the factory overhead for the following year will be $1,134,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 37,800 hours. The total machine hours for the year were 54,300 hours. The actual factory overhead for the year was $1,652,000. Required: (a) Determine the total factory overhead amount applied. (b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values. (c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the Chart of Accounts for exact wording of account titles.
Cavy Company estimates that the factory overhead for the following year will be $2,034,500. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 31,300 hours. The machine hours for the month of April for all of the jobs were 2,830. If the actual factory overhead for April totaled $180,455, determine the over- or underapplied amount for the month. Enter the amount as a positive number.

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