The TLX-71762 company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $207,000 of manufacturing overhead and an estimated allocation base of $ 90,000 in direct labor cost. The company has provided the following data: Raw Materials Inventory (all direct) Beginning $ 28,000 Work in Process Inventory $ 48,000 Finished Goods Inventory $ 68,000 Ending $13,000 $35,000 $ 68,000 The following actual costs were incurred during the year: Purchase of raw materials (all direct) Direct labor cost Manufacturing overhead cost $ 100,000 $110,000 $ 150,000 Suppose the company closes out any under- or over-applied overhead cost to Cost of Goods Sold. How much was the company's adjusted Cost of Goods Sold?
The TLX-71762 company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $207,000 of manufacturing overhead and an estimated allocation base of $ 90,000 in direct labor cost. The company has provided the following data: Raw Materials Inventory (all direct) Beginning $ 28,000 Work in Process Inventory $ 48,000 Finished Goods Inventory $ 68,000 Ending $13,000 $35,000 $ 68,000 The following actual costs were incurred during the year: Purchase of raw materials (all direct) Direct labor cost Manufacturing overhead cost $ 100,000 $110,000 $ 150,000 Suppose the company closes out any under- or over-applied overhead cost to Cost of Goods Sold. How much was the company's adjusted Cost of Goods Sold?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 10P: Determining job costcalculation of predetermined rate for applying overhead by direct labor cost and...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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