Watercraft's predetermined overhead rate is 200% of direct labor. Information on the company'sproduction activities during May follows.a. Purchased raw materials on credit, $220,000.b. Materials requisitions record use of the following materials for the month.$ 48,50033,00019,80023,2007,000131,50020,000$ 151,500Job 136Job 137Job 138Job 139Job 140Total direct materialsIndirect materialsTotal materials requisitionsc. Time tickets record use of the following labor for the month. These wages were paid in cash.$ 12,20010,70037,70039,2003,400103,200Job 136Job 137Job 138Job 139Job 140Total direct laborIndirect labor25,500Total labor cost$ 128,700d. Applied overhead to Jobs 136, 138, and 139.e. Transferred Jobs 136, 138, and 139 to Finished Goods Inventory.f. Sold Jobs 136 and 138 on credit at a total price of $545,000.g. Recorded the cost of goods sold for Jobs 136 and 138.h. Incurred the following actual other overhead costs during the month.Depreciation of factory buildingDepreciation of factory equipmentExpired factory insuranceAccrued property taxes payable$ 70,00037,50012,00036,500i. Applied overhead at month-end to the Work in Process Inventory account (for Job 137 and 140) usingthe predetermined overhead rate of 200% of direct labor cost. 4.(a) Compute the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventoryaccount balance.(b) Compute the total cost of each job finished but not sold, and prove that the sum of their costs equals the FinishedGoods Inventory balance.(c) Compute the total cost of each job sold, and prove that the sum of their costs equals the Cost of Goods Sold balance.Total Job Costs(a) Work in Process InventoryBalance(b) Finished Goods InventoryBalance(c) Cost of Goods SoldBalance$

Solution: Job No. 136 Job No. 137 Job No. 138 Job No. 139 Job No. 140 Materials $48,500.00…

a. Purchased raw materials on credit, $220,000. b. Materials requisitions record use of the following materials for the month. $ 48,500 33,000 19,800 23,200 7,000 131,500 20,000 $ 151,500 Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials requisitions c. Time tickets record use of the following labor for the month. These wages were paid in cash. $ 12,200 10,700 37,700 39,200 3,400 103,200 25,500 Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total labor cost $ 128,700

a. Purchased raw materials on credit, $220,000. b. Materials requisitions record use of the following materials for the month. $ 48,500 33,000 19,800 23,200 7,000 131,500 20,000 $ 151,500 Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials requisitions c. Time tickets record use of the following labor for the month. These wages were paid in cash. $ 12,200 10,700 37,700 39,200 3,400 103,200 25,500 Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total labor cost $ 128,700

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 15E: The books of Petry Products Co. revealed that the following general journal entry had been made at...

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Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
Queen Bees Honey, Inc., estimated its annual overhead to be $110,000 and based its predetermined overhead rate on 27,500 direct labor hours. At the end of the year, actual overhead was $106,000 and the total direct labor hours were 29,000. What is the entry to dispose of the over applied or under applied overhead?
A company has the following transactions during the week. Purchase of $3,000 raw materials inventory Assignment of $700 of raw materials inventory to Job 7 Payroll for 10 hours and $3,000 is assigned to Job 7 Factory depreciation of $1,750 Overhead applied at the rate of $200 per hour What is the cost assigned to Job 7 at the end of the week?
On December 1, Carmel Valley Production Inc. had a work in process inventory of 1,200 units that were complete as to materials and 50% complete as to labor and overhead. December 1 costs follow: During December the following transactions occurred: a. Purchased materials costing 50,000 on account. b. Placed direct materials costing 49,000 into production. c. Incurred production wages totaling 50,500. d. Incurred overhead costs for December: e. Applied overhead to work in process at a predetermined rate of 125% of direct labor cost. f. Completed and transferred 10,000 units to finished goods. (Hint: You should first compute equivalent units and unit costs. The unit cost should include applied, not actual, factory overhead.) Carmel Valley uses the weighted average cost method. The ending inventory of work in process consisted of 1,000 units that were completed as to materials and 25% complete as to labor and overhead. Required: Prepare the journal entries to record the above December transactions.
The books of Petry Products Co. revealed that the following general journal entry had been made at the end of the current accounting period: The total direct materials cost for the period was $40,000. The total direct labor cost, at an average rate of $10 per hour for direct labor, was one and one-half times the direct materials cost. Factory overhead was applied on the basis of $4 per direct labor hour. What was the total actual factory overhead incurred for the period? (Hint: First solve for direct labor cost and then for direct labor hours.)
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Abbey Products Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, 60,000; estimated materials costs, 50,000; estimated direct labor costs, 60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for November was 80,000, and the production statistics on November 30 are as follows: Required: 1. Compute the predetermined rate, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why?
Comacho Chemical Co. recorded costs for the month of 18,900 for materials, 44,100 for labor, and 26,250 for factory overhead. There was no beginning work in process, 8,000 units were finished, and 3,000 units were in process at the end of the period, two-thirds completed. Compute the months unit cost for each element of manufacturing cost and the total per unit cost. (Round unit costs to three decimal places.)
A company has the following transactions during the week. Purchase of $1,000 raw materials inventory Assignment of $500 of raw materials inventory to Job 5 Payroll for 20 hours with $1,000 assigned to Job 5 Factory utility bills of $750 Overhead applied at the rate of $10 per hour What is the cost assigned to Job 5 at the end of the week?
The records of Stone Inc. reflect the following data: Work in process, beginning of month4,000 units one-fourth completed at a cost of 2,500 for materials, 1,400 for labor, and 1,800 for overhead. Production costs for the monthmaterials, 130,000; labor, 70,000; and factory overhead, 82,000. Units completed and transferred to stock45,000. Work in process, end of month5,000 units, one-half completed. Compute the months unit cost for each element of manufacturing cost and the total per unit cost. (Round unit costs to three decimal places.)
The records of Burris Inc. reflect the following data: Work in process, beginning of month2,000 units one-half completed at a cost of 1,250 for materials, 675 for labor, and 950 for overhead. Production costs for the monthmaterials, 99,150; labor, 54,925; factory overhead, 75,050. Units completed and transferred to stock38,500. Work in process, end of month3,000 units, one-half completed. Compute the months unit cost for each element of manufacturing cost and the total per unit cost.
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?