# 2. A Company has two departments. Cutting and Finishing. The company uses acosting system and computes a predetermined overhead rate in each department. The cuttingDepartment bases its rate on machine-hours, and the Finishing Department bases itsdirect labor cost. At the beginning of the year, the company made the following estimates:job-orderDepartmentFinishing30,0005,000\$486,000\$270,000Cutting6,00048,000\$360,000\$50,000Direct labor-hoursMachine-hoursManufacturing overhead costDirect labor costRequire:1. Compute the predetermined overhead rate to be used in each department2. Assume that the overhead ratés that you computed in (1) above are in effect. The jobcost sheet for job 203, which was started and completed during the year. Showed thefollowing:DepartmentFinishing20Cutting6.Direct labor-hoursMachine-hoursManufacturing overhead costDirect labor cost80\$500\$70\$310\$150

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On May 10, Hudson Computing sold 90 Millennium laptop computers to Apex Publishers. At the
date of this sale, Hudson's perpetual inventory records included the following cost layers for the
Millennium laptops:

Purchase Date
Apr. 9
May 1
Total on hand

Quantity

Unit Cost

70

30

\$1,500
\$1,600

100

Total Cost
\$105,000

48,000
\$153,000

Prepare journal entries to record the cost of the 90 Millennium laptops sold on May 10, assume
that Hudson Computing uses the:
a. Specific identification method (62 of the units sold were purchased on April 9, and the t
maining units were purchased on May 1).
b. Average-cost method.
c. FIFO method.
d. LIFO method.
e. Discuss briefly the financial reporting differences that may arise from choosing the FlFOmethod over the LIFO method.

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Step 1

Since the student has posted multiple questions, we will answer only the first three requirements. Thank you.

Step 2

Requirement a:

Pass a journal entry to record cost of goods sold under specific identification method.

Step 3

Requirement b:

Pass a journal entry to record cost of goods sold under av...

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