The manager of Mandaue LTO has determined that it typically takes 30 minutes for thedepartment's employees to register a new car. In Mandaue, the fixed overhead ratecomputed on ah estimated 4,000 direct labor hours is P8 per direct labor hour, whereasthe variable overhead rate is estimated at P3 per direct labor hour.During July, 7,600 cars were registered in Mandaue and 3,700 direct labor hours wereworked in registering those vehicles. For the month, variable overhead was P10,730 andfixed overhead was P29,950Required:a. Compute the overhead variances using a four-variance approach.b. Compute the overhead variances using a three-variance approachc. Compute the overhead variances using a two-variance approachd. Compute the overhead variances uUsing a one way approach.

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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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Hi owns and operates three Compufix shops in Caloocan City area. Compufix repairs and upgrades computers on site. In August, purchases of materials equaled P 9,750, the beginning inventory materials was P 850, and the ending inventory of materials was P 950. Payments for direct labor during the month totaled P 18,570. Overhead incurred was P 15,000. The Caloocan City shops also spent P 5,000 on advertising during the month. Administrative costs (primarily accounting and legal services) amounted to P 3,000 for the month. Revenues for August were P 60,400. What was the total cost of services for August?
Stargazer Company logged 7,250 machine hours for the month of June. P42,500 was spent for manufacturing overhead and this overhead is allocated on the basis of machine hours. The company operates 5 departments; however, one department was closed for the month of June due to poor market conditions for its product. It was decided that this department (#3) should be allocated a lump sum of P5,000 as its share of June overhead. 24. If this policy is followed, how much overhead would be charged to Department 2, which used 1,750 machine hours? P 1,207 b. P 9,052. m а. na C. P10,259 etr od bluovEdoo d. P20,714
Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year—Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period’s estimated level of production. Sweeten also estimated $32,200 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.50 per machine-hour. Because Sweeten has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 14,500 $…
Production workers for Zachary Manufacturing Company provided 4,300 hours of labor in January and 3,400 hours in February. The company, whose operation is labor intensive, expects to use 48,300 hours of labor during the year. Zachary paid a $111,090 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months. Required Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.)
Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year-Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period's estimated level of production. Sweeten also estimated $28,200 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.50 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Estimated total machine-hours used Molding Fabrication 2,500 1,500 $ 16,200 $ 3.00 Estimated total fixed manufacturing overhead $ 12,000 $2.20…
Coronado Company produces high-quality microscopes for education and health care uses. The company uses a job order costing system. Because the microscopes’ optics require significant manual labor to ensure adherence to strict manufacturing specifications, the company applies overhead on the basis of direct labor hours. At the beginning of 2021, the company estimated its manufacturing overhead would be $1,960,000 and that employees would work a total of 49,000 direct labor hours. During March, the company worked on the following five jobs: Job BeginningBalance Direct Materialsadded duringMarch Direct Laboradded duringMarch Direct Labor Hoursadded duringMarch 134 $120,600 $6,000 $9,400 140 158 125,450 3,500 12,160 450 212 21,800 88,400 36,650 3,500 287 36,350 71,800 31,850 2,550 301 18,990 21,845 1,400 Total $304,200 $188,690 $111,905 8,040 Jobs 134 and 158 were started in January,…
Tower Mfg. allocates overhead based on machine hours. Tower estimates it will incur $200,000 of total overhead costs and use 10,000 machine hours in the coming year. During February, the Assembly department of Tower Mfg. used 375 machine hours. In addition, Tower incurred actual overhead costs as follows during February: indirect materials, $1,800; indirect labor, $5,700; depreciation on factory equipment, $8,000; and factory utilities, $500. 1. Compute the company’s predetermined overhead rate for the year. 2. Prepare journal entries to record (a) overhead applied for the Assembly department for February and (b) actual overhead costs used during February.
United Airlines estimates that the factory overhead for the following year will be $1,400,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300 hours. The actual factory overhead for the year was $1,475,000. (a) Determine the total factory overhead amount applied. (b) Calculate the over- or underapplied amount for the year. (c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.
Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year—Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period’s estimated level of production. Sweeten also estimated $25,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.70 per machine-hour. Because Sweeten has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 10,000…
Production workers for Adams Manufacturing Company provided 5,000 hours of labor in January and 2,100 hours in February. The company, whose operation is labor intensive, expects to use 48,000 hours of labor during the year. Adams paid a $100,800 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months. Required Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February? Note: Do not round intermediate calculations. Month January February Allocated Cost
Cavy Company estimates that the factory overhead for the following year will be $1,824,500. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 44,500 hours. The machine hours for the month of April for all of the jobs were 5,200. Journalize the entry to record the factory overhead applied in April. If an amount box does not require an entry, leave it blank. - Select - Select - Select - - Select -
Sweeten Company had no Jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year-Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period's estimated level of production. Sweeten also estimated $33,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.70 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional Information to enable calculating departmental overhead rates: Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Estimated total machine-hours used Estimated total fixed…

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