The predetermined overhead rate of Company C and Company F.

Question

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Answer 1

Question

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

b.

To determine

The amount of overhead cost applied to work in progress.

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.

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Answer 2

Question

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

b.

To determine

The amount of overhead cost applied to work in progress.

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.

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Answer 3

Question

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

b.

To determine

The amount of overhead cost applied to work in progress.

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.

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Answer 4

Question

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

b.

To determine

The amount of overhead cost applied to work in progress.

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.

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Answer 5

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

b.

To determine

The amount of overhead cost applied to work in progress.

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.

Answer 6

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

Answer 7

Chapter 11, Problem 7ESB

a.

To determine

The predetermined overhead rate of Company C and Company F.

Answer 8

a.

Expert Solution

Explanation of Solution

Predetermined overhead rate: It is an expected proportion of overhead costs recognized before an accounting period that depend on an alternative variable and used to distribute costs during the production procedure.

Determine the predetermined overhead rate for Company C

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$144,00012,000]=$12 per machine hour

Therefore the predetermined overhead rate for Company C is $12 per machine hours.

Determine the predetermined overhead rate for Company F

Predetermined Overhead Rate=[Total Overhead CostsEstimated Machine Hours]=[$320,00020,000]=$16 per machine hour

Therefore the predetermined overhead rate for Company F is $16 per machine hours.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

The amount of overhead cost applied to work in progress.

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

Answer 13

b.

To determine

The amount of overhead cost applied to work in progress.

Answer 14

b.

Expert Solution

Explanation of Solution

Determine the amount of overhead cost for Company C

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$12×12,300]=$147,600

Therefore the amount of overhead cost for Company C is $147,600.

Determine the amount of overhead cost for Company F

Amount of Overhead Cost=[Predetermined Overhead Rate×Actual Direct Labor Cost]=[$16×19,500]=$312,000

Therefore the amount of overhead cost for Company F is $312,000.

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

Answer 19

To determine

The amount of over-applied or under-applied manufacturing overhead cost.

Answer 20

Expert Solution

Explanation of Solution

With the actual overhead cost is $143,800 and the applied overhead cost is $147,600, Company C’s manufacturing overhead is over-applied. Since the applied overhead cost is higher than the actual overhead cost. There is a difference of $3,800 ($147,600-$143,800).

With the actual overhead cost is $318,000 and the applied overhead cost is $312,000, Company F’s manufacturing overhead is under-applied. Since the applied overhead cost is lower than the actual overhead cost. There is a difference of $6,000 lesser. ($318,000-$312,000).

Therefore Company C is over-applied by $3,800 and Company F is under-applied by $6,000.

Answer 21

Expert Solution

Answer 22

Expert Solution

Answer 23

Expert Solution

Answer 24

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.

Answer 25

c.

To determine

Closing the manufacturing overhead account that will affect the cost of goods sold of each company.

Answer 26

c.

Expert Solution

Explanation of Solution

The following is the way to close the manufacturing overhead account that will affect the cost of goods sold of each company:

From the results obtained above, Company C's overhead was over-applied, an excessive amount of expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by diminishing the amount of cost of goods sold.
From the results obtained above, Company F’s overhead was under-applied, lesser expense was made to cost of goods sold. The entry to close the manufacturing overhead account will address this situation by expanding the amount of cost of goods sold.