Sheridan Company installed a standard cost system on January 1. Selected transactions for the month of January are as follows. 1. 2. 3. 4. 5. Purchased 16,000 units of raw materials on account at a cost of $3.20 per unit. Standard cost was $3.00 per unit. Issued 16,000 units of raw materials for jobs that required 15,690 standard units of raw materials. Incurred 16,000 actual hours of direct labor at an actual rate of $5.00 per hour. The standard rate is $5.40 per hour. (Credi Factory Wages Payable.) Performed 16,000 hours of direct labor on jobs when standard hours were 16,180. Applied overhead to jobs at the rate of 100% of direct labor cost for standard hours allowed. Journalize the January transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amo

Sheridan Company installed a standard cost system on January 1. Selected transactions for the month of January are as follows. 1. 2. 3. 4. 5. Purchased 16,000 units of raw materials on account at a cost of $3.20 per unit. Standard cost was $3.00 per unit. Issued 16,000 units of raw materials for jobs that required 15,690 standard units of raw materials. Incurred 16,000 actual hours of direct labor at an actual rate of $5.00 per hour. The standard rate is $5.40 per hour. (Credi Factory Wages Payable.) Performed 16,000 hours of direct labor on jobs when standard hours were 16,180. Applied overhead to jobs at the rate of 100% of direct labor cost for standard hours allowed. Journalize the January transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amo

Name: Sheridan Company installed a standard cost system on January 1. Selec
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Description: Sheridan Company installed a standard cost system on January 1. Selected transactions for the month of January are as follows.1.2.3.4.5.Journalize the January transactions. (List all debit entries before credit entries. Credit account titles are aut

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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Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $321,600. During that time, the company produced 14,600 units of the M-008 and 2,200 units of the M-123. The direct costs of production were as follows. Direct materials Direct labor M-008 M-123 $116,800 $ 88,000 116,800 44,000 Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows. Cost Driver Number of machine-hours Number of production runs Number of inspections. Total overhead Total $204,800 160,800 Costs $156, 600 70,000 95,000 $321,600 Activity Level M-898 M-123 2,000 8,000 20 30 20 20 Total 10,000 40 50 Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much of the overhead will be assigned to each product if direct…
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The following transactions occurred during the month of April for Nelson Company: Apr. 1 Purchased materials costing $4,610 on account. 3 Requisitioned materials totaling $4,800 for use in production, $3,170 for Job 518 and the remainder for Job 519. 14 Recorded 65 hours of direct labor on Job 518 and 90 hours on Job 519 for the month. Direct laborers are paid at the rate of $14 per hour. 15 Applied overhead using a plantwide rate of $6.20 per direct labor hour. 25 Incurred and paid in cash actual overhead for the month of $973. 27 Completed and transferred Job 518 to Finished Goods. 30 Sold on account Job 517, which had been completed and transferred to Finished Goods in March, for cost ($2,770) plus 25%. (Enter this as two transactions.) Required: 1. Prepare journal entries for transactions from April 1 through 25. 2. (a) Prepare job-order cost sheets for Jobs 518 and 519. (b) Prepare journal entries for transactions on April 27 and 30.…
Nancy Inc., incurred the following actual overhead costs for the month of April: Account Cost Indirect materials $10,000 Indirect labor $20,000 Factory equipment depreciation $ 8,000 Factory building rent $ 7,000 Environmental remediation costs $ 2,000 Overhead is applied based on a predetermined rate of $8 per direct labor hour, and 6,500 direct labor hours were used during April. The balance of the T account for Manufacturing Overhead (MOH) would show which of the following? Group of answer choices $5,000 of credit balance of overallocated MOH $10,000 credit balance of under allocated MOH $5,000 of debit balance of overallocated MOH $10,000 debit balance of under allocated MOH
At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $680,000, and direct materials costs, $400,000. At year-end, the company's records show that actual overhead costs for the year are $945,600. Actual direct materials cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory $420,000 81,000 50,000 Total actual direct materials cost $551,000 1. Determine the predetermined overhead rate. 2&3. Enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below.
Your Company applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any underapplied or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During March, the following transactions were recorded by the company: Direct labor costs $20,000 Actual manufacturing costs: $17,000 How much overhead was applied for the period?
Baehr Company is a manufacturing company with a fiscal year that runs from July 1 to June 30. The company uses a job-order accounting system for its production costs. A predetermined overhead rate based upon direct labor hours is used to apply overhead to individual jobs. A flexible budget of overhead costs was prepared for the fiscal year as shown below. Direct labor hours 100,000 120,000 140,000 Variable overhead costs $325,000 $390,000 $455,000 Fixed overhead costs 216,000 216,000 216,000 Total overhead $541,000 $606,000 $671,000 Although the annual ideal capacity is 150,000 direct labor hours, company officials have determined 120,000 direct labor hours to be normal capacity for the year. The information presented below is for November. Jobs 83-50 and 83-51 were completed during November. Inventories November 1: Raw materials and…
Cello Industries commenced operations in January and uses a standard cost accounting system. During the month of January, Cello purchased and used 32,000 pounds of raw materials at a cost of $2.80 per pound. The standard price is $3.00 per pound. Cello completed 15,500 units of finished goods during January and the standard quantity of raw materials per unit is 2.0 pounds.. Which of the following journal entries properly records the purchase and use of raw materials in January? A. B. C. D. WIP inventory Dr. $93,000 Dr. $93,000 Dr. $92,600 Dr. $92,600 O Choice A O Choice B O Choice C O Choice D O None of the above Price variance Cr. $6,400 Cr. $6,200 Dr. $6,200 Dr. $6,400 Quantity variance Dr. $3,000 Dr. $2,800 Cr. $2,800 Cr. $3,000 Accounts payable Cr. $89,600 Cr. $89,600 Cr. $96,000 Cr. $96,000
Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows: Direct materials: 4 units @ $6.50 $26.00 Direct Labor: 8 hours @ $8.50 68 Variable factory overhead: 8 hours @ $7.00 56 Fixed factory overhead: 8 hours @ $25 20 Total standard cost per unit $170,000 The following information pertains to activity for December: 1. Direct materials acquired during the month amounted to 26,350 units at $6.40 per unit. All materials were consumed in operations. 2. Arrow incurred an average wage rate of $8.75 for 51,400 hours of activity. 3. Total overhead incurred amounted to $508,400. Budgeted fixed overhead totals $1.8 million and is spread evenly throughout the year. 4. Actual production amounted to 6,500 completed units. Compute Arrow's direct labor variances.
Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows: Materials: (7 kilograms × $10 per kilogram) $ 70 Labor: (3 hours × $22 per hour) $ 66 All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July: In-process beginning inventory none In-process ending inventory—90% complete as to labor 900 units Units completed during the month 7,100 units Budgeted output 8,600 units Purchases of materials, in kilograms (AQ) 33,000 Total actual labor costs incurred $ 526,000 Direct labor hours worked (AQ) 22,000 hours Materials purchase-price variance $ 2,900 unfavorable Increase in materials inventory in July 1,300 kilograms Beginning inventory of materials 0 kg.…
Bergan Company estimates that total factory overhead costs will be $1,539,000 for the year. Direct labor hours are estimated to be 513,000. Required: A. For Bergan Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. Round your answer to the nearest cent. B. During May, Bergan Company accumulated 19,000 hours of direct labor costs on Job 200 and 23,000 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. C. Prepare the journal entry on May 30 to apply factory overhead to both jobs in May according to the predetermined overhead rate. Refer to the Chart of Accounts for exact wording of account titles.
Puvo, Incorporated, manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: Direct materials Direct labor Variable manufacturing overhead During March, the following activity was recorded by the company: • The company produced 4,200 units during the month. • A total of 21,200 pounds of material were purchased at a cost of $15,380. • There was no beginning inventory of materials on hand to start the month; at the end of the month, 5,420 pounds of material remained in the warehouse. . During March, 1,270 direct labor-hours were worked at a rate of $48.50 per hour. • Variable manufacturing overhead costs during March totaled $15,861. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for March is: Multiple Choice O $2,780 F Standard Quantity…