1. a. We are doing our budgeting for 2021. In 2021 we will apply overhead based on machine hours. Our 2021 estimated manufacturing overhead is $720,000. We expect to work 50,000 direct labor hours at $25/hour, and use 20,000 machine hours. Our predetermined overhead rate is $________________________ per _______________ 1.b. (Continuation of 1.a.) Job 572 uses $750 of direct materials, 20 direct labor hours and 5 machine hours. The cost of the job is $ _____________________ 1. c. (continuation of 1.a, b) The work-in-process account for the month has the following items: Direct labor4,000 hours @ $25/hour Direct materials$150,000 Work in process, beginning inventory$60,000 Work in process, ending inventory$25,000 2,100 machine hours were used. What amount was transferred from Work in Process Inventory to Finished Goods Inventory? Show it in the journal entry to record the transfer.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
1. a. We are doing our budgeting for 2021. In 2021 we will apply overhead based on machine hours. Our 2021 estimated manufacturing overhead is $720,000. We expect to work 50,000 direct labor hours at $25/hour, and use 20,000 machine hours. Our predetermined overhead rate is
$________________________ per _______________
1.b. (Continuation of 1.a.) Job 572 uses $750 of direct materials, 20 direct labor hours and 5 machine hours. The cost of the job is
$ _____________________
1. c. (continuation of 1.a, b) The work-in-process account for the month has the following items:
Direct labor4,000 hours @ $25/hour
Direct materials$150,000
Work in process, beginning inventory$60,000
Work in process, ending inventory$25,000
2,100 machine hours were used.
What amount was transferred from Work in Process Inventory to Finished Goods Inventory? Show it in the
1. d. (continuation of 1. a, b, c) We close out the Manufacturing Overhead account each month. Our Manufacturing Overhead account shows accumulated costs of $74,000. Give the journal entry to close out the Manufacturing Overhead account.
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