Cost allocation of Overheads Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses. Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations. Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc. Journal Entries Journal entries are the first step in recording financial transactions and preparation of financial statements. These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits. Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events. To Prepare: Journal entry for recording application of factory overhead at 90% of direct labor cost Solution: Transaction Particulars Debit ($) Credit ($) a Work in Process $117,900 Manufacturing Overhead $117,900 (Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

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Answer 1

Question

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

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I want to correct answer general accounting question

Costs of $9,200 were incurred to acquire goods and make them ready for sale. The goods were shipped to the buyer (FOB shipping point) for a cost of $600. Additional necessary costs of $1,300 were incurred to acquire the goods. What is the buyer's total cost of merchandise inventory?

Answer 2

Question

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

Answer 6

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

Answer 7

Chapter 19, Problem 7QS

To determine

Introduction:

Cost allocation of Overheads

Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of direct costs such as manufacturing expenses and of indirect costs in the form of selling and administrative expenses.

Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.

Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.

Journal Entries

Journal entries are the first step in recording financial transactions and preparation of financial statements.

These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry for recording application of factory overhead at 90% of direct labor cost

Solution:

Transaction Particulars Debit ($) Credit ($)
a
Work in Process
$117,900

Manufacturing Overhead

$117,900

(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 19 - Prob. 1DQ Ch. 19 - Prob. 2DQ Ch. 19 - Prob. 3DQ Ch. 19 - Prob. 4DQ Ch. 19 - Prob. 5DQ Ch. 19 - Prob. 6DQ Ch. 19 - Prob. 7DQ Ch. 19 - Prob. 8DQ Ch. 19 - Prob. 9DQ Ch. 19 - Prob. 10DQ

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Chapter 19 Solutions

Transaction	Particulars	Debit ($)	Credit ($)
a	Work in Process	$117,900
	Manufacturing Overhead		$117,900
	(Being overhead applied at a pre-determined rate of 125% of direct labor cost of $131,000)