Factory Overhead Rates and Account BalancesProstheses Industries operates two factories. The manufacturing operations of Factory 1 are m e intensive, while the manufacturing operations of Factory 2 are laborintensive. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factoryoverhead costs, direct labor hours, and machine hours are as follows:Factory 1Estimated factory overhead cost for fiscalyear beginning August 1Estimated direct labor hours for yearEstimated machine hours for yearActual factory overhead costs for AugustActual direct labor hours for AugustActual machine hours for August1,730a. Determine the factory overhead rate for Factory 1. Round your answer to the nearest cent.per machine hour$887,200Factory 222,180$70,930$1,049,40015,900$90,6001,430b. Determine the factory overhead rate for Factory 2. Round your answer to the nearest cent.per direct labor hourc. Determine the factory overhead applied to production in each factory for August.Factory 11Factory 2d. Determine the balances of the factory overhead accounts for each factory as of August 31, and indicate whether the amounts represent (overapplied) or underappliedfactory overhead. d. Determine the balances of the factory overhead accounts for each factory as of August 31, and indicate whether the amounts represent (overapplied) or underappliedfactory overhead.Factory 1Factory 2overappliedunderappliede. Explain why Factory 1 uses machine hours to allocate factory overhead while Factory 2 uses direct labor hours.Factory overhead should be allocated using a base that is related to (causes) the overhead costs incurred. Factory 1 has a machine-intensive ✔ manufacturingoperation, and Factory 2 has a labor-intensive✓ manufacturing operation. Thus, Factory 1 uses machine hours, and Factory 2 uses direct labor hours toallocate factory overhead.FeedbackCheck My Worka. Divide the estimated factory overhead by the estimated machine hours (Factory 1).b. Divide the estimated factory overhead by the estimated direct labor hours (Factory 2).

“Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Prostheses Industries operates two factories. The manufacturing operations of Factory 1 are me intensive, whille the manufacturing operations of Factory 2 are labor intensive. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows: Estimated factory overhead cost for fiscal year beginning August 1 Estimated direct labor hours for year Estimated machine hours for year Actual factory overhead costs for August Actual direct labor hours for August Actual machine hours for August Factory 1 $887,200 Factory 1 Factory 2 22,180 $70,930 1,730 a. termine the factory overhead rate for Factory 1. Round your answer to per machine hour Factory 2 $1,049,400 15,900 $90,600 1,430 the answer to the nearest cent. b. Determine the factory overhead rate for Factory 2. Round your answer to the nearest cent. per direct labor hour c. Determine the factory overhead applied to production in each factory for August.

Prostheses Industries operates two factories. The manufacturing operations of Factory 1 are me intensive, whille the manufacturing operations of Factory 2 are labor intensive. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows: Estimated factory overhead cost for fiscal year beginning August 1 Estimated direct labor hours for year Estimated machine hours for year Actual factory overhead costs for August Actual direct labor hours for August Actual machine hours for August Factory 1 $887,200 Factory 1 Factory 2 22,180 $70,930 1,730 a. termine the factory overhead rate for Factory 1. Round your answer to per machine hour Factory 2 $1,049,400 15,900 $90,600 1,430 the answer to the nearest cent. b. Determine the factory overhead rate for Factory 2. Round your answer to the nearest cent. per direct labor hour c. Determine the factory overhead applied to production in each factory for August.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Wilmington Company has two manufacturing departments-Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year-Job Bravo. Estimated Data Manufacturing overhead costs Direct labor-hours Machine-hours Job Bravo Direct labor-hours Machine-hours Assembly 12 4 Assembly $ 770,000 55,000 22,000 Fabrication 4 7 Fabrication $ 990,000 33,000 110,000 1. Plantwide manufacturing overhead applied to Job Bravo 2. Manufacturing overhead applied from Assembly to Job Bravo 2. Manufacturing overhead applied from Fabrication to Job Bravo 2. Total departmental manufacturing overhead applied to Job Bravo Total 16 11 Total $ 1,760,000 88,000 132,000 Required: 1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied…
Mason Company has two manufacturing departments-Machining and Assembly. All of the company's manufacturing overhead costs are fixed costs. It provided the following estimates at the beginning of the year as well as the following information for Jobs A and B: Estimated Data Manufacturing overhead Direct labor-hours Machine-hours Job A Direct labor-hours Machine-hours Job B Direct labor-hours Machine-hours Machining $5,054,000 19,000 266,000 Machining Assembly 5 10 11 2 Machining 4 12 Assembly 5 3 Assembly $361,000 266,000 14,000 Total 15 13 Total 9 15 Total $5,415,000 285,000 280,000 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? 2. Assume Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much…
Hanshaben
Garza Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Customizing Machine-hours 23,000 15,000 Direct labor-hours 7,000 7,000 Total fixed manufacturing overhead cost $ 82,800 $ 30,100 Variable manufacturing overhead per machine-hour $ 1.40 Variable manufacturing overhead per direct labor-hour $ 4.70 The estimated total manufacturing overhead for the Customizing Department is closest to:
Carver Company uses a plantwide overhead rate based on direct labor costs. Suppose that Carver raises its wage rate for direct labor during the year. How would that affect the overhead applied? The total cost of jobs?
XYZ Ltd. is a manufacturing company that follows the cost allocation approach for overhead allocation. The company uses three cost pools for allocating overhead costs: Material Handling, Machine Maintenance, and Factory Utilities. Each cost pool has its own cost driver. For the current accounting period, the company incurred the following costs and activity levels: Material Handling Costs: $150,000 Cost Driver: Number of Material Orders - 2,500 orders Machine Maintenance Costs: $250,000 Cost Driver: Machine Hours - 10,000 hours Factory Utilities Costs: $200,000 Cost Driver: Direct Labor Hours - 5,000 hours Calculate the overhead allocation rate for each cost pool based on the given information. A) Material Handling: $60 per order, Machine Maintenance: $25 per hour, Factory Utilities: $40 per direct labor hour. B) Material Handling: $30 per order, Machine Maintenance: $25 per hour, Factory Utilities: $40 per direct labor hour. C) Material Handling: $60 per order, Machine…
Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job 400 was started and completed. The following information was available with respect to this job: Direct materials Direct labor cost Machine-hours used 151,000 $ 656,000 $ 4.90 $ 320 $ 250 36 Compute the total manufacturing cost assigned to Job 400. 3. If Job 400 includes 50 units, what is the unit product cost for this job? 4. If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?
Luthan Company uses a plantwide predetermined overhead rate of $22.30 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $267,600 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $266,000 and 12,400 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.
Orange Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine- hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Milling Customizing 16,000 2,000 118,400 2.10 O $19.00 per machine-hour $2.10 per machine-hour $9.50 per machine-hour O $7.40 per machine-hour $ S The predetermined overhead rate for the Milling Department is closest to: S $ 12,000 8,000 87,200 3.30
Manji
Franklin, Inc. estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation. Supplies Materials handling Property taxes Production setup Rent Maintenance Supervisory salaries $190,100. 20,000 33,200 a. Predetermined overhead rate b. Applied manufacturing overhead 13,300 20,100 43,000 39,000 281,300 The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 201,000 and for machines were 128,000. Required a. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the Year 3 period if actual machine hours were 143,000. (Do not round intermediate calculations.) per machine hour
Frame Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine- hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour O $24,000 O $110,400 $86,400 Casting Customizing 19,000 1,000 $ 138,700 $ 1.60 The estimated total manufacturing overhead for the Customizing Department is closest to: $60,379 11,000 8,000 $ 86,400 S 3.00