Concept introduction:
Predetermined
Predetermined overhead allocation is a method of allocation of overhead costs to the product units. Under this method, the overhead costs are allocated to the product units using the allocation base. The allocation base is identified based on the type of production activities.
Requirement-1:
To calculate: The amount of overhead cost assigned to job W.
Concept introduction:
Predetermined overhead allocation:
Predetermined overhead allocation is a method of allocation of overhead costs to the product units. Under this method, the overhead costs are allocated to the product units using the allocation base. The allocation base is identified based on the type of production activities.
Requirement-2:
To indicate: The way the cost of job W cost sheet shall be reported in the financial statement at the end of the year.
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MANAGERIAL ACCOUNTING FOR MANAGERS EBOOK
- On August 1, Cairle Companys work-in-process inventory consisted of three jobs with the following costs: During August, four more jobs were started. Information on costs added to the seven jobs during the month is as follows: Before the end of August, Jobs 70, 72, 73, and 75 were completed. On August 31, Jobs 72 and 75 were sold. Required: 1. Calculate the predetermined overhead rate based on direct labor cost. 2. Calculate the ending balance for each job as of August 31. 3. Calculate the ending balance of Work in Process as of August 31. 4. Calculate the cost of goods sold for August. 5. Assuming that Cairle prices its jobs at cost plus 20 percent, calculate Cairles sales revenue for August.arrow_forwardChoos the correct letter of answer: Beginning work in process was P125,000. Manufacturing costs incurred for the month were P835,000. There were P200,000 of partially finished goods remaining in work in process inventory at the end of the month. What was the cost of goods manufactured during the month?A. P1,160,000B. P 910,000C. P 760,000D. Cannot be determined. Beginning finished goods inventory wasP130,000. The cost of goods manufacturedfor the month was P760,000. And the endingfinished goods inventory was P150,000.What was the cost of goods sold for themonth?A. P 20,000.B. P740,000.C. P780,000.D. P760,000.arrow_forwardCompany had the following inventory balances at the beginning and end of November:November 1 November 30Raw Materials P17,000 P20,000Finished Goods P50,000 P44,000Work in Process P 9,000 P11,000During November, P39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was P8 per direct labor-hour, and it paid its direct labor workers P10 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained P4,700 of direct materials cost. The Company incurred P28,000 of actual manufacturing overhead cost during the month and applied P26,400 in manufacturing overhead cost. The amount of direct labor cost in the November 30 Work in Process inventory was:arrow_forward
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- Need helparrow_forwardDogarrow_forwardJob cost sheets show the following information: Job January February March Completed Sold AA2 $2,600 $1,400 February Not sold AA4 4,840 January February AA5 3,230 February March ААЗ 3,408 $2,321 April Not sold Total $7,440 $8,038 $2,321 What are the balances in the work in process inventory, finished goods inventory, and cost of goods sold for January, February, and March? Work in Finished Process Goods COGS January $ February $ Marcharrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning