A Company uses job order costing and has chosen direct labor hours to allocate its manufacturing overhead. The company estimates that total direct labor hours to be operated next year are 250,000 hours. The estimated variable overhead is $10 per hour and the estimated fixed overhead costs are $500,000. The predetermined overhead rate is: None of the answers given O a. b. $6 C. $12 d. $2 e. $30

A Company uses job order costing and has chosen direct labor hours to allocate its manufacturing overhead. The company estimates that total direct labor hours to be operated next year are 250,000 hours. The estimated variable overhead is $10 per hour and the estimated fixed overhead costs are $500,000. The predetermined overhead rate is: None of the answers given O a. b. $6 C. $12 d. $2 e. $30

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 12P: Overhead application rate Roll Tide Manufacturing Inc. uses a job order cost system and standard...

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Event Forms expects $120,000 in overhead during the next year. It doesn't know whether it should apply overhead on the basis of its anticipated direct labor hours of 6,000 or its expected machine hours of 5,000. What would be the product cost under each predetermined allocation rate if the last job incurred $3,500 in direct material cost, 55 direct labor hours, and 55 machine hours? Wages are paid at $17 per hour.
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Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Coops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate on 24,286 direct labor hours. At the end of the year, actual overhead was $90,000 and the total direct labor hours were 24,100. What is the entry to dispose of the over applied or under applied overhead?
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