White Company has two departments, Cutting and Finishing. The company uses a job-order costing sys- tem and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing 6,000 30,000 Direct labor-hours Machine-hours 48,000 5,000 Total fixed manufacturing overhead cost $264,000 $366,000 $2.00 - Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour $4.00 Required: 1. Compute the predetermined overhead rate to be used in each department. 2. Assume that the overhead rates that you computed in (1) above are in effect. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing Direct labor-hours Machine-hours .6 20 Materials requisitioned 80 4 Direct labor cost $500 $310 $70 $150 Compute the total manufacturing cost assigned to Job 203

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
7:09
AA
soul.su.edu.ph
40
Direct labor cost
Machine-hours used
Compute the total manufacturing cost assigned to Job 400.
3. During the year, the company worked a total of 146,000 machine-hours on all jobs and incurred actual
manufacturing overhead costs of $1,350,000. What is the amount of underapplied or overapplied
overhead for the year? If this amount were closed out entirely to Cost of Goods Sold would the journal
entry increase or decrease net operating income?
EXERCISE 2-15 Departmental Overhead Rates [LO2-1, LO2-2, LO2-3]
White Company has two departments, Cutting and Finishing. The company uses a job-order costing sys-
tem and computes a predetermined overhead rate in each department. The Cutting Department bases its
rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning
of the year, the company made the following estimates:
Department
Cutting
Finishing
6,000
30,000
Direct labor-hours
Machine-hours
48,000
5,000
Total fixed manufacturing overhead cost
$264,000
$366,000
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
$2.00
$4.00
Required:
1. Compute the predetermined overhead rate to be used in each department.
2. Assume that the overhead rates that you computed in (1) above are in effect. The job cost sheet for Job
203, which was started and completed during the year, showed the following:
Department
Cutting
Finishing
Direct labor-hours.
Machine-hours..
.6
20
Materials requisitioned
80
4
Direct labor cost
$500
$310
$70
$150
Compute the total manufacturing cost assigned to Job 203
Transcribed Image Text:7:09 AA soul.su.edu.ph 40 Direct labor cost Machine-hours used Compute the total manufacturing cost assigned to Job 400. 3. During the year, the company worked a total of 146,000 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,350,000. What is the amount of underapplied or overapplied overhead for the year? If this amount were closed out entirely to Cost of Goods Sold would the journal entry increase or decrease net operating income? EXERCISE 2-15 Departmental Overhead Rates [LO2-1, LO2-2, LO2-3] White Company has two departments, Cutting and Finishing. The company uses a job-order costing sys- tem and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing 6,000 30,000 Direct labor-hours Machine-hours 48,000 5,000 Total fixed manufacturing overhead cost $264,000 $366,000 Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour $2.00 $4.00 Required: 1. Compute the predetermined overhead rate to be used in each department. 2. Assume that the overhead rates that you computed in (1) above are in effect. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing Direct labor-hours. Machine-hours.. .6 20 Materials requisitioned 80 4 Direct labor cost $500 $310 $70 $150 Compute the total manufacturing cost assigned to Job 203
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education