COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Chapter 4, Problem 4.28E
Accounting for manufacturing
| Budgeted |
$4,140,000 |
| Budgeted direct labor-hours | 180,000 |
| Actual manufacturing overhead costs | $4,337,000 |
| Actual direct labor-hours | 189,000 |
- 1. Compute the budgeted manufacturing overhead rate.
Required
- 2. Prepare the summary
journal entry to record the allocation of manufacturing overhead. - 3. Compute the amount of under- or overallocated manufacturing overhead. Is the amount significant enough to warrant proration of overhead costs, or should Creative Woodworking write it off to cost of goods sold? Prepare the journal entry to dispose of the under- or overallocated overhead.
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Accounting for manufacturing overhead. Creative Woodworking uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or over allocated overhead, if immaterial, is written off to Cost of Goods Sold. During 2017, Creative recorded the following:
Dustin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dustin allocates manufacturing overhead costs using direct manufacturing labor costs. Dustin provides the following information:
Read the
requirements2.
Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017.(Enter your answer as a number [notas a percentage] rounded to two decimal places, X.XX.)
Actual manufacturing overhead rate
=
Budgeted manufacturing overhead rate
=
Requirement 2. During March, the job-cost record for Job 626 contained the following information:
Direct materials used
$60,000
Direct manufacturing labor costs
$30,000
Compute the cost of Job 626 using (a) actual costing and (b) normal costing.
Actual
Costing
Direct materials
Direct manufacturing labor costs…
Desert Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Desert allocates manufacturing overhead costs using direct manufacturing labor costs.
Desert provides the following information:
E (Click the icon to view the information.)
Read the requirements
...
Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017. (Enter your answer as a number [not as a percentage] rounded to two decimal places, X.XX.)
Actual manufacturing overhead rate
Budgeted manufacturing overhead rate
Data Table
Requirements
Budget for 2017
Actual Results for 2017
Direct material costs
2,100,000 $
2.050,000
1. Compute the actual and budgeted manufacturing overhead rates for 2017.
2. During March, the job-cost record for Job 626 contained the following information:
Direct manufacturing labor costs
1,500,000
1,460,000
Direct materials used
$50,000
Manufacturing overhead costs…
Chapter 4 Solutions
COST ACCOUNTING
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Which of the following does not accurately...Ch. 4 - Sturdy Manufacturing Co. assembled the following...Ch. 4 - For which of the following industries would...Ch. 4 - ABC Company uses job-order costing and has...Ch. 4 - Under Stanford Corporations job costing system,...Ch. 4 - (10 min) Job costing, process costing. In each of...Ch. 4 - Actual costing, normal costing, accounting for...Ch. 4 - Job costing, normal and actual costing. Atkinson...Ch. 4 - Budgeted manufacturing overhead rate, allocated...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Job costing, consulting firm. Frontier Partners, a...Ch. 4 - Time period used to compute indirect cost rates....Ch. 4 - Accounting for manufacturing overhead. Creative...Ch. 4 - Job costing, journal entries. The University of...Ch. 4 - Journal entries, T-accounts, and source documents....Ch. 4 - Job costing, journal entries. Donald Transport...Ch. 4 - Job costing, unit cost, ending work in process....Ch. 4 - Job costing; actual, normal, and variation from...Ch. 4 - Job costing; variation on actual, normal, and...Ch. 4 - Proration of overhead. The Ride-On-Wave Company...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Service industry, job costing, law firm. Kidman ...Ch. 4 - Service industry, job costing, two direct- and two...Ch. 4 - Proration of overhead. (Z. Iqbal, adapted) The Zaf...Ch. 4 - Normal costing, overhead allocation, working...Ch. 4 - Proration of overhead with two indirect cost...Ch. 4 - General ledger relationships, under- and...Ch. 4 - Overview of general ledger relationships. Estevez...Ch. 4 - Allocation and proration of overhead. Resource...Ch. 4 - (2530 min.) Job costing, ethics. Joseph Underwood...Ch. 4 - Job costingservice industry. Market Pulse performs...
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