E2-5 Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $300,000 for the year, and machine usage is estimated at 125,000 hours.
For the year, $322000 of overhead costs are incurred and 130,000 hours are used.
Instructions
(a) Compute the manufacturing overhead rate for the year
(b) What is the amount of under- or overapplied overhead at December 31?
(c) Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cast of goods sold.
E2-7 Crawford Corporation incurred the following transactions.
1. Purchased raw materials on account $46,300.
2. Raw materials of $36.000 were reauisitioned to the factory. An analvsis of the materials
3. Factory labor costs incurred were $59,900, of which $51,000 pertained to factory wages payable and 58,900 pertained to employer payroll taxes payable.
4. Time tickets indicated that $54,000 was direct labor and $5,900 was indirect labor.
5. Manufacturing overhead costs incurred on account were $80,500.
6. Depreciation on the company's office building was $8,100.
7. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
8. Goods costing S88,000 were completed and transferred to finished goods.
9. Finished goods costing $75.000 to manufacture were sold on account for $103,000.
Instructions
JoLin-ialize the transactions. (Omit explanations.)
E2-13 Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year
|
Estimated overhead
|
$960,000
|
|
Actual overhead
|
$982,800
|
|
Estimated decorator hours
|
40,000
|
|
Actual decorator hours
|
40,500
|
The company uses Operating Overhead in place of Manufacturing Overhead.
Instructions
(a) Compute the predetermined overhead rate.
(b) Prepare the entry to apply the overhead for the year
(c) Determine whether the overhead was under- or overappl led and by how much.
P2-4A Agassi Company uses a job order cost system in each oE its three rnan ufacturi depa.rtments. manufacturing overhead is applied to jobs on the basis of direct lahl cost in Department 0, direct labor hours in Department E. and machine hours Department K.
In establishing the predetermined overhead rates for 2017, the following estimates were made for the year.
|
|
Department
|
|
D
|
E
|
K
|
|
Manufacturing overhead
|
$1,200,000
|
$1,500,000
|
$900,000
|
|
Direct labor costs
|
$1,500,000
|
$1,2.500013
|
$450,000
|
|
Direct labor hours
|
100,000
|
125,000
|
40,000
|
|
Machine hours
|
400,000
|
500,000
|
120,000
|
During January, the job cost sheets showed the following costs and production data.
|
|
Department
|
|
D
|
E
|
K
|
|
Direct materials used
|
$140,000
|
$126,000
|
578,000
|
|
Direct labor costs
|
$120,000
|
$110,01)0
|
537,500
|
|
Manufacturing overhead incurred
|
$ 99,000
|
$124,000
|
579,000
|
|
Direct labor hours
|
8,000
|
11,000
|
3,500
|
|
Machine hours
|
34,000
|
45,000
|
10,400
|
Instructions
(a) Compute the predetermined overhead rate for each department,
(a) Compute the total manufacturing costs assigned to jobs in January in each depart¬ment.
(c) Compute the under- or overapplied overhead for each department at January 31.
E3-3 The ledger of American Company has the following work in process account.
|
Work in Process-Painting
|
|
5/1
|
Balance
|
3,590
|
5131
|
Transferred out
|
?
|
|
5/31
|
Materials
|
5,1-60
|
|
|
|
|
5/31
|
Labor
|
2,530
|
|
|
|
|
5/31
|
Overhead
|
1,380
|
|
|
|
|
5/31
|
Balance
|
|
|
|
|
Production records show that there were 400 units in the beginning inventory, 30% com¬plete, 1,600 units started, and 1,700 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550. The. units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.
Instruction
(a) How many units are in process at May 31? 05) What is the unit materials cost for May?
(c) What is the unit conversion cost for May?
(d) What is the total cost of units transferred out in May?
(e) What is the cost of the May 31 inventory?
E3-7 The Sanding Department of Quik Furniture Company has the follming production and manufacturing cost data for March 2017, the first month of operation.
Production: 7,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials S33,000; labor $21,000; and overhead $36,000.
Instructions
Prepare a production cost report.
E3-13 The Blending Department of Luongo Company has the following cost and produc¬tion data for the month of April.
|
Costs:
|
|
|
Work in process, April 1
|
|
|
Direct materials: 100% complete
|
$100,000
|
|
Conversion costs: 20% complete
|
70,000
|
|
Cost of work in process. April 1
|
70,000
|
|
Costs incurred during production in April
|
|
|
Direct materials
|
$ 800,000
|
|
Conversion costs
|
365,000
|
|
Costs incurred in April
|
51,165,000
|
Units transferred out totaled 17.000. Ending work in process was 1,000 units that arc 100% complete as to materials and 40% complete as to conversion costs.
Instructions
(a) Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April.
(b) Compute the unit costs for the month.
(c) Determine the costs to be assigned to the units transferred out and in ending work in process.
P3-2A Rosenthal Company manufactures bowling balls through two processes.: Molding and Packaging. Tn. the Molding Department, the urethane, rubber; plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the begin¬ning of each process. Labor and manufacturing overhead arc incurred uniformly through¬out each process. Production and cost data for the Molding Department during June 2017 are presented below.
|
Production Data
|
June
|
|
Beginning work in process units
|
-0-
|
|
Units started into production
|
22,000
|
|
Ending work in process units
|
2,000
|
|
Perron/ complete-ending inventory
|
40%
|
|
Cost Data
|
|
|
Materials
|
$198.00
|
|
Labor
|
534,500
|
|
Overhead
|
112,800
|
|
Total
|
$364,400
|
Instructions
(a) Prepare a schedule showing physical units of production.
(b) Determine the equivalent units of production for materials and conversion costs.
(c) Compute the unit costs of production.
(d) Determine the costs to be assigned to the units transferred out and in prorz-sg for June.
(e) Prepare a production cost report for the Molding Department for the month of June.