Drill 1: Ogar Donut Store allocates its manufacturing overhead based on estimated direct labor hours. The store expects its MOH to be $125,000 for the month with 3,125 hours worked. At the end of the month, direct labor hours totaled to 3,300 hours. Problem: 1. Determine the pre-determined allocation rate. 2. Apply the overhead rate to get manufacturing overhead for the month.

Drill 1: Ogar Donut Store allocates its manufacturing overhead based on estimated direct labor hours. The store expects its MOH to be $125,000 for the month with 3,125 hours worked. At the end of the month, direct labor hours totaled to 3,300 hours. Problem: 1. Determine the pre-determined allocation rate. 2. Apply the overhead rate to get manufacturing overhead for the month.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 4BE: Applying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000...

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When setting its predetermined overhead application rate. Tasty Turtle estimated its overhead would be $75,000 and manufacturing would require 25,000 machine hours in the next year. At the end of the year, it found that actual overhead was $74,000 and manufacturing required 24,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under- or over applied overhead.
PREDETERMINED FACTORY OVERHEAD RATE Millerlile Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 540,000. Total estimated direct labor hours are 50,000. Total estimated direct labor costs are 900,000. Total machine hours are estimated to be 80,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
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During August, Skyler Company worked on three jobs. Data relating to these three jobs follow: Overhead is assigned on the basis of direct labor hours at a rate of 2.30 per direct labor hour. During August, Jobs 39 and 40 were completed and transferred to Finished Goods Inventory. Job 40 was sold by the end of the month. Job 41 was the only unfinished job at the end of the month. Required: 1. Calculate the per-unit cost of Jobs 39 and 40. (Round unit costs to nearest cent.) 2. Compute the ending balance in the work-in-process inventory account. 3. Prepare the journal entries reflecting the completion of Jobs 39 and 40 and the sale of Job 40. The selling price is 140 percent of cost.
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