COLLEGE ACCOUNTING ETEXT+CONNECT ACCESS
COLLEGE ACCOUNTING ETEXT+CONNECT ACCESS
16th Edition
ISBN: 9781264624256
Author: Haddock
Publisher: MCG
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Chapter 1, Problem 1MF
To determine

Identify the questions to be asked to judge the firm’s performance, control operations, decisions, and plans for the future.

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Affordable Furniture makes sofas, loveseats, and recliners. The company allocates manufacturing overhead based on direct labor hours. Affordable estimated a total of $1.0 million of manufacturing overhead and 30,000 direct labor hours for the year. Job 310 consists of a batch of 8 recliners.
1. Record the proper journal entry for each transaction. 2. By the end of​ January, was manufacturing overhead overallocated or​ underallocated? By how​ much?
Rocky River Fast Lube does oil changes on vehicles in 15 minutes or less. The variable cost associated with each oil change is $12 (oil, filter, and 15 minutes of employee time). The fixed costs of running the shop are $8,000 each month (store manager salary, depreciation on shop and equipment, insurance, and property taxes). The shop has the capacity to perform 4,000 oil changes each month.
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