ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Chapter 20, Problem 4PSA
a.
To determine
Job order costing is a cost evaluation method that considers each job separate and assigns costs to them. It is mostly applicable in the service industry wherein every job has a separate requirement.
To compute: Predetermined
b.
To determine
Job order costing:
Job order costing is a cost evaluation method that considers each job separate and assigns costs to them. It is mostly applicable in the service industry wherein every job has a separate requirement.
To compute: The
c.
To determine
Job order costing:
Job order costing is a cost evaluation method that considers each job separate and assigns costs to them. It is mostly applicable in the service industry wherein every job has a separate requirement.
To compute: Under and over applied overhead.
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Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to
jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K.
In establishing the predetermined overhead rates for 2020, the following estimates were made for the year.
Manufacturing overhead
Direct labor costs
Direct labor hours
Machine hours
Direct materials used
Direct labor costs
Direct labor hours
D
$924,000
$1,320,000
Machine hours
150,000
Manufacturing overhead incurred
600,000
Department
E
K
$1,500,000
$900,000
$1,875,000 $675,000
During January, the job cost sheets showed the following costs and production data.
D
125,000
12,000
750,000
51,000
K
$210,000
$189,000
$117,000
$180,000
$165,000
$56,250
$148,500 $186,000 $118,500
60,000
120,000
Department
E
16,500
67,500
5,250
10,440
Agassi Company uses a job order cost system in each of its three manufacturing
departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in
Department D, direct labor hours in Department E, and machine hours in Department K.
In establishing the predetermined overhead rates for 2014, the following estimates
were made for the year.
Department
E
D
K
Manufacturing overhead
Direct labor costs
Direct labor hours
$1,200,000
$1,500,000
$1,500,000
$1,250,000
125,000
500,000
$900,000
$450,000
40,000
120,000
100,000
Machine hours
400,000
During January, the job cost sheets showed the following costs and production data.
Department
D
E
K
Direct materials used
$140,000
$120,000
$ 99,000
8,000
34,000
$126,000
$110,000
$78,000
$37,500
$79,000
Direct labor costs
Manufacturing overhead incurred
Direct labor hours
$124,000
11,000
3,500
Machine hours
45,000
10,400
(a) Compute the predetermined overhead rate for each department.
(b) Compute the total manufacturing costs…
The Putman Corporation uses a predetermined overhead rate to apply
manufacturing overhead to jobs. The predetermined overhead rate is
based on labor cost in Dept. A and on machine-hours in Dept. B. At the
beginning of the year, the Corporation made the following estimates:
Direct labor cost
Manufacturing overhead
Direct labor-hours
Machine-hours
67% and $3.00
What predetermined overhead rates would be used in Dept. A and Dept.
B, respectively?
O 150% and $5.00
150% and $3.00
Dept. A Dept. B
$ 60,000 S
$ 90,000 $
6,000
2,000
67% and $5.00
40,000
45,000
9,000
15,000
Chapter 20 Solutions
ACCOUTING PRIN SET LL INCLUSIVE
Ch. 20 - Prob. 1QCh. 20 - Prob. 2QCh. 20 - Prob. 3QCh. 20 - Prob. 4QCh. 20 - Prob. 5QCh. 20 - Prob. 6QCh. 20 - Prob. 7QCh. 20 - Prob. 8QCh. 20 - Prob. 9QCh. 20 - Prob. 10Q
Ch. 20 - Prob. 11QCh. 20 - Prob. 12QCh. 20 - Prob. 13QCh. 20 - Prob. 14QCh. 20 - Prob. 15QCh. 20 - Prob. 16QCh. 20 - Prob. 17QCh. 20 - Prob. 18QCh. 20 - Prob. 1BECh. 20 - Prob. 2BECh. 20 - Prob. 3BECh. 20 - Prob. 4BECh. 20 - BE20-5 Data pertaining to job cost sheets for...Ch. 20 - Prob. 6BECh. 20 - Prob. 7BECh. 20 - Prob. 8BECh. 20 - Prob. 9BECh. 20 - Prob. 10BECh. 20 - Prob. 1DIECh. 20 - Prob. 2DIECh. 20 - Prob. 3DIECh. 20 - Prob. 4DIECh. 20 - Prob. 5DIECh. 20 - Prob. 1ECh. 20 - E20-2 Stine Company uses a job order cost system....Ch. 20 - Prob. 3ECh. 20 - Prob. 4ECh. 20 - Prob. 5ECh. 20 - Prob. 6ECh. 20 - Prob. 7ECh. 20 - Prob. 8ECh. 20 - Prob. 9ECh. 20 - Prob. 10ECh. 20 - Prob. 11ECh. 20 - Prob. 12ECh. 20 - Prob. 13ECh. 20 - Prob. 1PSACh. 20 - Prob. 2PSACh. 20 - Prob. 3PSACh. 20 - Prob. 4PSACh. 20 - Prob. 1EYCTCh. 20 - Prob. 2EYCTCh. 20 - Prob. 3EYCTCh. 20 - Prob. 4EYCTCh. 20 - Prob. 5EYCTCh. 20 - Prob. 7EYCT
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- The following information, taken from the books of Herman Brothers Manufacturing represents the operations for January: The job cost system is used, and the February cost sheet for Job M45 shows the following: The following actual information was accumulated during February: Required: 1. Using the January data, ascertain the predetermined factory overhead rates to be used during February, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead. 3. Prepare the entries to record the following for February operations: a. The liability for total factory overhead. b. Distribution of factory overhead to the departments. c. Application of factory overhead to the work in process in each department, using direct labor hours. (Use the predetermined rate calculated in Requirement 1.) d. Closing of the applied factory overhead accounts. e. Recording under- and overapplied factory overhead and closing the actual factory overhead accounts.arrow_forwardPrimera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided: Actual results reported by department and product during the year are as follows: Required: 1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product. 2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product. 3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm? 4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?arrow_forwardThe cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?arrow_forward
- Compute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.arrow_forwardPlease use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardPlease use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: It estimates there will be five orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forward
- A company has the following information relating to its production costs: Compute the actual and applied overhead using the companys predetermined overhead rate of $23.92 per machine hour. Was the overhead over applied or under applied, and by how much?arrow_forwardGerken Fabrication Inc. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of March: a. Compute the total production cost of each job. b. Prepare the journal entries to charge the costs of materials, labor, and factory overhead to Work in Process. c. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. d. Compute the unit cost of each job. e. Compute the selling price per unit for each job, assuming a mark-on percentage of 50%.arrow_forwardRipley, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. Required: 1. What was the predetermined overhead rate? 2. What was the applied overhead for last year? 3. Was overhead over- or underapplied, and by how much? 4. What was the total cost per unit produced (carry your answer to four significant digits)?arrow_forward
- MountaIn Peaks applies overhead on the basis of machine hours and reports the following information: A. What is the predetermined overhead rate? B. How much overhead was applied during the year? C. Was overhead over- or under applied, and by what amount? D. What is the journal entry to dispose of the over- or under applied overhead?arrow_forwardMountain Tops applies overhead on the basis of direct labor hours and reports the following information: A. What is the predetermined overhead rate? B. How much overhead was applied during the year? C. Was overhead over applied or under applied, and by what amount? D. What is the journal entry to dispose of the over applied or under applied overhead?arrow_forwardAgassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $854,000 $1,500,000 $1,020,000 Direct labor costs $1,220,000 $1,875,000 $675,000 Direct labor hours 150,000 125,000 60,000 Machine hours 600,000 750,000 120,000 During January, the job cost sheets showed the following costs and production data. Department D E K Direct materials used $210,000 $189,000 $117,000 Direct labor costs $180,000 $165,000 $56,250 Direct labor costs $180,000 $165,000 $56,250 Manufacturing overhead incurred $148,500 $186,000 $118.500 Direct labor hours 12,000 16,500 5,250 Machine hours 51,000 67,500 10,390 (a) Compute the predetermined overhead rate for each…arrow_forward
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