Requlred: 1. Compute the predetermined overhead rate for the year. Break the rate down Into varlable and fixed elements. 2 Prepare a standard cost card for the company's product. 3a. Compute the standard direct labor-hours allowed for the year's production. 3b. Complete the following Manufacturing Overhead T-account for the year. 4. Determine the reason for any underappled or overapplied overhead for the year by computing the varlable overhead rate an efficlency varlances and the fixed overhead budget and volume varlances.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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![**Lane Company Manufacturing Case Study**
Lane Company manufactures a single product that requires significant labor input. Overhead costs are applied based on standard direct labor-hours. The predetermined variable manufacturing overhead is set at $5.20 per direct labor-hour, with the annual budgeted fixed manufacturing overhead at $2,484,000.
**Standard Cost Calculations:**
- **Materials:** 4 pounds per unit at $11.00 per pound
- **Labor:** 1.5 hours per unit at $13.60 per hour
**Planned Operations:**
The company planned operations based on a denominator activity level of 270,000 direct labor-hours, aiming to produce 180,000 units. Here are the actual figures for the recent year:
- **Units Produced:** 216,000
- **Direct Labor-Hours Worked:** 351,000
- **Variable Manufacturing Overhead Cost:** $1,953,000
- **Fixed Manufacturing Overhead Cost:** $2,088,000
**Tasks Required:**
1. **Predetermined Overhead Rate Calculation:** Break down into variable and fixed components.
2. **Standard Cost Card Preparation:** For the company's product.
3. **Standard Direct Labor-Hours Computation:** For the year’s production.
4. **Manufacturing Overhead T-account Completion:** Explain any discrepancies by computing the variable overhead rate and efficiency variances, along with the fixed overhead budget and volume variances.
Enter your answers in the designated tabs for each section. Below is a dedicated area for entering the computation of standard direct labor-hours:
- **Standard Direct Labor-Hours:** [Input Field]
Please ensure all computations are accurately filled in the provided fields for analysis.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ad6af2d-5a67-42f5-a474-673e389551ed%2F8c2586f9-acff-43ee-b350-225da929e6a5%2F3uoxbwh_processed.jpeg&w=3840&q=75)
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