Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 4, Problem 18P
Phillips Products, Inc. had a remaining credit balance of $10,000 in its under- and overapplied factory
Required:
- 1. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is not considered to be material.
- 2. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is considered to be material.
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Problem 4-30
Coronado, Inc. manufactures ergonomically designed computer furniture.
Coronado uses a job order costing system. On November 30, the Work in
Process Inventory consisted of the following jobs:
Job No.
Item
Units
Accumulated Cost
CC723
Computer caddy
25,000
$970,000
CH291
Chair
18,000
432,000
PS812
Printer stand
25,000
251,000
$1,653,000
On November 30, Coronado's Raw Materials Inventory account totaled
$679,000, and its Finished Goods Inventory totaled $3,495,400.
Coronado applies manufacturing overhead on the basis of machine hours.
The company's manufacturing overhead budget for the year totaled
$4,600,000, and the company planned to use 920,000 machine hours
during the year. Through the first eleven months of the year, the company
used a total of 836,000 machine hours, total manufacturing overhead
amounted to $4,284,500, and Cost of Goods Sold was $4,294,500.
Coronado purchased $8,750,250 in raw materials in December and
incurred…
Need help. accounting
Davidson Company's manufacturing overhead account
showed a $6,200 under-allocated balance on December
31, 2019. Other accounts showed the following balances on
December 31, 2019:
Materials inventory
$50,000
WIP inventory
$30,000
Finished goods inventory
$20,000
COGS
$100,000
Davidson adjusts COGS for the balance in manufacturing
overhead. The balance in COGS after closing out the
balance in manufacturing overhead is:
Chapter 4 Solutions
Principles of Cost Accounting
Ch. 4 - What are factory overhead expenses, and what...Ch. 4 - What are three categories of factory overhead...Ch. 4 - What are the distinguishing characteristics of...Ch. 4 - When a products cost is composed of fixed and...Ch. 4 - What effect does a change in volume have on total...Ch. 4 - Distinguish between a step-variable cost and a...Ch. 4 - What is the basic premise underlying the high-low...Ch. 4 - What are the advantages and disadvantages of the...Ch. 4 - Differentiate between an independent variable and...Ch. 4 - Prob. 10Q
Ch. 4 - What is a flexible budget, and how can management...Ch. 4 - How does accounting for factory overhead differ in...Ch. 4 - What is the function and use of each of the two...Ch. 4 - What are two types of departments found in a...Ch. 4 - What are the two most frequently used methods of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - Is it possible to close the total factory overhead...Ch. 4 - What are the shortcomings of waiting until the...Ch. 4 - What are the two types of budget data needed to...Ch. 4 - Prob. 21QCh. 4 - What factory operating conditions and data are...Ch. 4 - Prob. 23QCh. 4 - How does activity-based costing differ from...Ch. 4 - What steps must a company take to successfully...Ch. 4 - What is the relationship between activity-based...Ch. 4 - Prob. 27QCh. 4 - Prob. 28QCh. 4 - If the factory overhead control account has a...Ch. 4 - Prob. 30QCh. 4 - Classify each of the following items of factory...Ch. 4 - Ames Automotive Company has accumulated the...Ch. 4 - Prob. 3ECh. 4 - Using the data in E4-2 and spreadsheet software,...Ch. 4 - El Paso Products Company has accumulated the...Ch. 4 - Computing unit costs at different levels of...Ch. 4 - Identifying basis for distribution of service...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - Compute the total job cost for each of the...Ch. 4 - Classify each of the following items of factory...Ch. 4 - Job 25AX required 5,000 for direct materials,...Ch. 4 - Job 19AB required 10,000 for direct materials,...Ch. 4 - Match each of the following cost pools with the...Ch. 4 - The books of Petry Products Co. revealed that the...Ch. 4 - The general ledger of Lawson Lumber Co. contains...Ch. 4 - Nelson Fabrication Inc. had a remaining credit...Ch. 4 - Housley Paints Co. had a remaining debit balance...Ch. 4 - The cost behavior patterns below are lettered A...Ch. 4 - Miller Minerals Co. manufactures a product that...Ch. 4 - Scattergraph method Using the data in P4-2 and a...Ch. 4 - Using the data in P4-2 and Microsoft Excel: 1....Ch. 4 - Listed below are the budgeted factory overhead...Ch. 4 - Menlo Materials is divided into five departments,...Ch. 4 - Distribution of service department costs to...Ch. 4 - Journalizing the distribution of service...Ch. 4 - Channel Products Inc. uses the job order cost...Ch. 4 - Determining job costcalculation of predetermined...Ch. 4 - Focus Fabrication Co. uses ABC. The factory...Ch. 4 - Mansfield Manufacturing Co. uses ABC. The factory...Ch. 4 - Hughes Products Inc. uses a job order cost system....Ch. 4 - Abbey Products Company is studying the results of...Ch. 4 - The following information, taken from the books of...Ch. 4 - Rockford Company has four departmental accounts:...Ch. 4 - Luna Manufacturing Inc. completed Job 2525 on May...Ch. 4 - Phillips Products, Inc. had a remaining credit...Ch. 4 - Nathan Industries had a remaining debit balance of...Ch. 4 - Chrome Solutions Company manufactures special...Ch. 4 - Activity-based Costing
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- Nathan Industries had a remaining debit balance of $20,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is considered to be material.arrow_forwardNelson Fabrication Inc. had a remaining credit balance of $20,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the overapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the credit balance in Under-and Overapplied Factory Overhead.arrow_forwardHousley Paints Co. had a remaining debit balance of $25,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the underapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the debit balance in Under-and Overapplied Factory Overhead.arrow_forward
- If the factory overhead control account has a credit balance of 2,000 at the end of the first month of the fiscal year, has the overhead been under- or overapplied for the month? What are some probable causes for the credit balance?arrow_forwardAt the end of the fiscal year, there s a relatively minor balance in the factory overhead account. What procedure can be used for disposing of the balance in the accountarrow_forwardThis is the complete question with Detailarrow_forward
- Pharoah Engineering Contractors incurred employee payroll costs of $32,400 ($25,200 direct and $7,200 indirect) on an engineering project. The company applies overhead at a rate of 25% of direct labor cost. Record the entries to assign payroll liabilities and to apply overhead. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation (To record service salary and wages) (To record the applied overhead) Debit Creditarrow_forwardKalamazoo corporation has provided data concerning the company's manufacturing overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $53,000 and the total of the credits to the account was $73,000. Which of the following statements is true? Manufacturing overhead for the month was overapplied by $20,000 Manufacturing overhead applied to work in process for the month was $63,000 Manufacturing overhead transferred from finished goods to cost of goods sold during the month was $73,000 Actual manufacturing overhead for the month was $63,000 None of the above. Please explain answer.arrow_forwardWildhorse Engineering Contractors incurred employee payroll costs of $43,920 ($34,160 direct and $9,760 indirect) on an engineering project. The company applies overhead at a rate of 25% of direct labor cost. Record the entries to assign payroll liabilities and to apply overhead. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation (To record service salary and wages) (To record the applied overhead) Debit Creditarrow_forward
- Sagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the total of the credits to the account was $66,000. Which of the following statements is true? Multiple Choice Manufacturing overhead for the month was underapplied by $10,000. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000. Manufacturing overhead applied to Work in Process for the month was $76,000. Actual manufacturing overhead incurred during the month was $66,000.arrow_forwardDuring the first quarter, France Company incurs the following direct labor costs: January $53,600, February $51,700, and March $70,700. For each month, prepare the entry to assign overhead to production using a predetermined rate of 75% of direct labor cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)arrow_forwardExercise 3-8 Applying Overhead; Journal Entries; Disposing of Underapplied or Overapplied Overhead (LO3-1, LO3-2, LO3-4] The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead 497,664 (b) 82,944| Work in Process 6,280 (c) 316,000 93,000 414,720 56,000 Finished Goods 34,000 | (d) 774,000 136,000 (а) 414,720 Bal. 774,000 672,000 Bal. (c) Bal. Bal. (b) Bal. Cost of Goods Sold (d) 672,000|| The overhead that had been applied to production during the year is distriputed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: Work in Process, ending Finished Goods, ending Cost of Goods Sold $ 26,880 65,280 322,560 $ 414,720 Overhead appliedarrow_forward
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