S. J. MATEK Marine Machine Co., Ltd. manufactures outboard motors and an assortment of other marine equipment. The company uses a job-order costing system. Normal costing is used, and manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $1,520,200, and management estimates the firm's practical capacity at 69,100 machine hours. The firm purchased marine propellers from Guangdong Snow land Refrigeration Equipment Co., Ltd. for $8,240 on account. b. A requisition was filed by the Gauge Department supervisor for 280 pounds of clear plastic. The material cost $ 0.70 per pound when it was purchased. The Motor Testing Department supervisor requisitioned 320 feet of electrical wire, which is considered an indirect material. The wire cost $0.10 per foot when it was purchased. An electric utility bill of $900 was paid in cash. Direct-labor costs incurred in May were $73,500. C. d. e. f. g. May's insurance cost was $2,100 for insurance on the cars driven by sales personnel. The policy had been prepaid in March. h. Metal tubing costing $2,800 was purchased on account. i. A cash payment of $1,850 was made on outstanding accounts payable. j. Indirect-labor costs of $19,000 were incurred during May. Depreciation on equipment for May amounted to $8,500. Job number G22, consisting of 60 tachometers, was finished during May. The total cost of the job was $1,200. k. m. During May, 6,500 machine hours were used. Sales on account for May amounted to $181,000. The cost of goods sold in May was $142,500. Required: 1. Calculate the company's predetermined overhead rate for the year. Prepare journal entries to record the following events, which occurred during May
S. J. MATEK Marine Machine Co., Ltd. manufactures outboard motors and an assortment of other marine equipment. The company uses a job-order costing system. Normal costing is used, and manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $1,520,200, and management estimates the firm's practical capacity at 69,100 machine hours. The firm purchased marine propellers from Guangdong Snow land Refrigeration Equipment Co., Ltd. for $8,240 on account. b. A requisition was filed by the Gauge Department supervisor for 280 pounds of clear plastic. The material cost $ 0.70 per pound when it was purchased. The Motor Testing Department supervisor requisitioned 320 feet of electrical wire, which is considered an indirect material. The wire cost $0.10 per foot when it was purchased. An electric utility bill of $900 was paid in cash. Direct-labor costs incurred in May were $73,500. C. d. e. f. g. May's insurance cost was $2,100 for insurance on the cars driven by sales personnel. The policy had been prepaid in March. h. Metal tubing costing $2,800 was purchased on account. i. A cash payment of $1,850 was made on outstanding accounts payable. j. Indirect-labor costs of $19,000 were incurred during May. Depreciation on equipment for May amounted to $8,500. Job number G22, consisting of 60 tachometers, was finished during May. The total cost of the job was $1,200. k. m. During May, 6,500 machine hours were used. Sales on account for May amounted to $181,000. The cost of goods sold in May was $142,500. Required: 1. Calculate the company's predetermined overhead rate for the year. Prepare journal entries to record the following events, which occurred during May
Chapter1: Financial Statements And Business Decisions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:S. J. MATEK Marine Machine Co., Ltd. manufactures outboard motors and an assortment of other marine equipment. The company uses a job-order costing
system. Normal costing is used, and manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is
$1,520,200, and management estimates the firm's practical capacity at 69,100 machine hours.
The firm purchased marine propellers from Guangdong Snow land Refrigeration Equipment Co., Ltd. for $8,240 on account.
a.
b.
A requisition was filed by the Gauge Department supervisor for 280 pounds of clear plastic.
с.
The material cost $ 0.70 per pound when it was purchased.
d.
The Motor Testing Department supervisor requisitioned 320 feet of electrical wire, which is considered an indirect material. The wire cost $ 0.10 per foot
when it was purchased.
An electric utility bill of $900 was paid in cash.
e.
f.
Direct-labor costs incurred in May were $73,500.
g.
May's insurance cost was $2,100 for insurance on the cars driven by sales personnel. The policy had been prepaid in March.
h
Metal tubing costing $2,800 was purchased on account.
i.
A cash payment of $1,850 was made on outstanding accounts payable.
j.
Indirect-labor costs of $19,000 were incurred during May.
k.
Depreciation on equipment for May amounted to $8,500.
Job number G22, consisting of 60 tachometers, was finished during May. The total cost of the job was $1,200.
m. During May, 6,500 machine hours were used.
Sales on account for May amounted to $181,000. The cost of goods sold in May was $142,500.
n
Required:
1.
Calculate the company's predetermined overhead rate for the year.
Prepare journal entries to record the following events, which occurred during May
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