Exercise 2-10 Applying Overhead Cost to a Job [LO2-2] Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $5,000 for direct materials, $8,000 for direct labor, and $6,000 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $2,500 for direct materials and $4,000 for direct labor. Required: la. Should any overhead cost be applied to Job W at year-end? Yes No 1b. How much overhead cost should be applied to Job W? Overhead cost 2. How will the costs included in Job W's job cost sheet be reported within Sigma Corporation's financial statements at the end of the year? Raw Materials Work-in-Process Finished Goods

Exercise 2-10 Applying Overhead Cost to a Job [LO2-2] Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $5,000 for direct materials, $8,000 for direct labor, and $6,000 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $2,500 for direct materials and $4,000 for direct labor. Required: la. Should any overhead cost be applied to Job W at year-end? Yes No 1b. How much overhead cost should be applied to Job W? Overhead cost 2. How will the costs included in Job W's job cost sheet be reported within Sigma Corporation's financial statements at the end of the year? Raw Materials Work-in-Process Finished Goods

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 15.9EX: Classifying costs The following is a manufacturing cost report of Marching Ants Inc. Evaluate and...

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Classifying costs The following is a manufacturing cost report of Marching Ants Inc. Evaluate and correct this report. Marching Ants Inc. Manufacturing Costs For the Quarter Ended June 30 Materials used in production (including 56,200 of indirect materials) 607,500 Direct labor (including 84,400 maintenance salaries) 62,500 Factory overhead: Supervisor salariesplant 517,500 Heat, light, and power-plant 140,650 Sales salaries 348,750 Promotional expenses 315,000 Insurance and property taxesplant 151,900 Insurance and property taxescorporate offices 219,400 Depreciationplant and equipment 123,750 Depreciationcorporate offices 90,000 3,076,950
Exercise 2-2 (Algo) Apply Overhead Cost to Jobs [LO2-2] Luthan Company uses a plantwide predetermined overhead rate of $22.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $265,200 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $265,000 and 11,700 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.
Q#2 The ASF Corporation manufactures one product and accounts for costs by a job orders cost system You have obtained the following information for the year ended December 31 2010 from the Corporations books and records Total manufacturing cost added during 2010 was 1,000,000 Cost of goods manufactured was 970,000 Factory overhead was applied to work in process inventory at 80% of direct labor (applied factory overhead for the year 27% of the total manufacturing cost) Beginning work in process inventory January 1 was 80% of ending work-in – process inventory December 31 Required 1. Prepare a formal statement of cost good manufactured
Question 4 Part II During the month of April, Advent Company had two jobs. The manufacturing costs incurred were:Raw materials purchased $ 48,000Factory Labour Incurred $ 80,000Manufacturing Overheads Incurred $ 64,800Costs assignment to the jobs were as follows:Direct Materials: Job # Black $27,000Job # White $21,000Direct Labour: Job # Black $52,000Job # White $28,000The Advent Company took two jobs in June Job: Black and Job: White. The application rate forManufacturing Overheads has been pre-determined as 80% of Direct Labour Costs. Required:a. Compute the total costs allocated to each Job. b. Compute the amount of over/under allocated overheads.
Q# 2: Job Order Costing.The Searider Company uses a job-order costing system. The following transactions occurred inApril:a. Raw materials were purchased on account, $180,000.b. Raw materials used in production, $148,000 ($130,000 direct materials and $18,000 indirectmaterials).c. Accrued direct labor cost of $75,000 and indirect labor cost of $105,000.d. Depreciation recorded on factory equipment, $40,000.e. Other manufacturing overhead costs accrued during April, $118,000.f. The company applies manufacturing overhead cost to production using a predetermined overheadrate of $6 per machine-hours. A total of 46,000 machine-hours were used in April.g. Jobs costing $495,000 according to their job cost sheets were completed during April andtransferred to Finished Goods.h. Jobs that had cost $450,000 to complete according to their job cost sheets were shipped tocustomers during the month. These jobs were sold on account at 30% above cost.Required:1. Prepare journal entries to record the…
2-6 Computing job costs and gross profit P1 P2 P3 Information on Kwon Mfg.’s activities for its first month of operations follows. a. Purchased $100,000 of raw materials on credit. b. Materials requisitions show the following materials used for the month. Job 201 $48,200 Job 202 23,600 Total direct materials 71,800 Indirect materials 8,620 Total materials used $80,420 c. Time tickets show the following labor used for the month. Job 201 $39,200 Job 202 12,600 Total direct labor 51,800 Indirect labor 24,200 Total labor used $76,000 d. Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate of 80% of direct materials cost. e. Transferred Job 201 to Finished Goods Inventory. f. (1) Sold Job 201 for $163,760 on credit. (2) Record cost of goods sold for Job 201. g. Incurred the following actual other overhead costs for the month.…
Q.2-B ( 5 marks ) On March 01, 2009 HASF Engineering Works had two jobs in process as follows. ……………………………………………… Job No. 18 ……….. Job No. 19Direct Material ……………………………. . 50,000(Job18) ………………. 18,000(Job 19)Direct Labour ………………………………. 36,000 ………………. 12,000Direct Labour Hours …………………… . 10,000 ……………….. 8,000Direct Machine Hours ………………… 3,000 …………………. 2,500Applied Factory Overhead ……… .. Rs. 3 per direct …… Rs. 5 per direct……………………………………… (Machine Hour) …….. (Labour Hour) During March Job No. 20, 21, 22 and 23 were started. Direct materials of Rs. 37,500 and direct labour of 1800 hours at an average rate of Rs. 15 per hour used during the month. Pre determined FOH applied rate is Rs. 10 per direct labour hour on all jobs starting in March.Job No. 23 was the only incomplete job at the end of March. Direct material of Rs. 15,000 and direct labour of Rs. 9,000 were charged to job. At the end of month job No. 22 was the only finished job on hand. It has accumulated…