Ivana Company employs normal costing for its production. The following data are providedduring the current year:Net purchases of raw materials during the yearTotal labor costs during the yearDepreciation of factory assets during the yearUtilities on the factory during the yearRaw materials inventoryWork in process inventoryFinished goods inventoryBeginning200,000500,000600,000500,000800,000100,000300,000•The entity uses a single account for its direct material and indirect materials. Indirectmaterial•used is one-fourth of the total material used.The indirect labor cost is 1/8 of the total labor costs.1. What is the over or under application of overhead?The overhead application rate is 80% of direct labor costs.Any over or under application of overhead is considered material.Ending300,000200,000300,000VVV Co. manufactures electric motor drills. During July 2020, Job 007 for the production of600 motor drills was completed at the following costs:Direct MaterialsDirect LaborApplied Factory Overhead (P60,000 allowance included)Direct materialsDirect labor2,100,0001,200,000510,000Final inspection of Job 007 disclosed 15 defective units and 45 spoiled units.The defective drills were reworked with the following costs:P 6,500P20,000?OverheadAnd the spoiled drills were can be sold for P152,000.2. If the Rework cost and Spoilage is attributable to internal failure and charged to allproduction, what is the total cost transferred to Finished Goods Inventory of Job 007?3. If the Rework cost and Spoilage is attributable to exacting specifications and charged tospecific job. what is the unit cost of Job 007?

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• The entity uses a single account for its direct material and indirect materials. Indirect material • used is one-fourth of the total material used. • The indirect labor cost is 1/8 of the total labor costs. • The overhead application rate is 80% of direct labor costs. Any over or under application of overhead is considered material. 1. What is the over or under application of overhead?

• The entity uses a single account for its direct material and indirect materials. Indirect material • used is one-fourth of the total material used. • The indirect labor cost is 1/8 of the total labor costs. • The overhead application rate is 80% of direct labor costs. Any over or under application of overhead is considered material. 1. What is the over or under application of overhead?

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 what is left after subtracting direct labor and direct material from total manufacturing costs. True or False True False
provide correct option with explanation
Manufacturing overhead consists of all Manufacturing overhead consists of all a.costs other than direct materials and direct labor. b.manufacturing costs other than direct materials. c.manufacturing costs other than direct materials and direct labor. d.costs other than direct materials.
The basis used for allocating manufacturing overhead (such as machine hours or direct labor hours) should closely align with O a. estimation techniques used in other areas of financial reporting. O b. the GAAP rules for allocating overhead. O C. the incurrence of overhead costs. d. the way that competitors allocate overhead.
Prime cost is the (Total )summation of Select one: a. Direct material +Direct Labour +Direct Expenses b. Direct material +Direct Labour + Selling Overheads c. Direct material +Direct Labour +Factory overheads d. Direct material +Direct Labour +Office Overheads
The equivalent units for the FIFO unit cost represent: a. work done during the current period. b. work done during the current period and the previous period. c. work done on units completed during the current period. d. work done during the previous period. e. the same thing as the equivalent units for the weighted average unit cost.
How do I calculate manufacturing overhead based on direct labor hours
Which of the following statement(s) islare correct? I. Manufacturing overhead includes all manufacturing costs except direct labor and direct materials II. Prime costs consist of direct material and direct labor. Conversion cost is essentially direct labor O A. I only O B. Il only O C. Both I & II D. Neither I nor II
Total manufacturing costs for a period consist of the cost of direct materials used, the cost of direct labour incurred, and the actual manufacturing overhead cost incurred during the period. True O False
Factory or Manufacturing Overhead costs would include all of the following except: A) Indirect materials B) Direct materials C) Depreciation expense D) Insurance expense
The following is part of Production Overheads a. Office Salary b. Depreciation of Office AC c. Depreciation of Machine d. Salesman Salary
for 11; 12; 13; and 15 11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal place. 12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? Note: Round intermediate calculations and your "Percentage" answers to 2 decimal places. 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. 15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal place.