Harwood Company uses a Job-order costing system that applies overhead cost to Jobs on the basis of machine-hours. Thecompany's predetermined overhead rate of $260 per machine-hour was based on a cost formula that estimates $260,000of total manufacturing overhead for an estimated activity level of 100,000 machine-hours.Required:1. Assume that during the year the company works only 95,000 machine-hours and Incurs the following costs In theManufacturing Overnead and Work in Process accounts: Compute the amount of overhead cost that would be applied toWork In Process for the year and make the entry In your T-accounts.2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance In yourManufacturing Overhead T-account28. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.Complete this question by entering your answers in the tabs belovw.Req 1Req 2AReq 28Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. (If no entry is requirtransaction/event, select "No journal entry required" in the first account field.)Vlew transaction letJournal entry worksheetRecord the entry to close the balance of the manufacturing overhead accountto COGS account.Note: Enter debits before credits.EventGeneral JoumalDebitCredit1 Harwood Company uses a Job-order costing system that applies overhead cost to Jobs on the basis of machine-hours. The company'spredetermined overhead rate of $2.60 per machine-hour was based on a cost formula that estimates $260,000 of total manufacturingoverhead for an estimated activity level of 100.000 machine-hours.Required:1. Assume that durling the year the company works only 95,000 machine-hours and incurs the following costs In the ManufacturingOverhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work In Process for the yearand make the entry In your T-accounts.2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance In your Manufacturing OverheadT-account.28. Prepare a Journal entry to close the company's underapplied or overappled overhead to Cost of Goods Sold.Complete this question by entering your answers in the tabs belovw.Req 1Req 2AReq 28Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts.Manufacturing OverheadWork in ProcessDebitCreditDebitCredit(Maintenance)41,000(a)(Direct materials)910,000(Indirect materials)(Indirect labor)10,000(Direct labor)110,00080,000(Overhead) (a)(Utilities)47,000(Insurance)9,000(Depreciation)63,000Balance< Req 1Req 2A >

Name: Harwood Company uses a Job-order costing system that applies overhead
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Harwood Company uses a Job-order costing system that applies overhead cost to Jobs on the basis of machine-hours. Thecompany's predetermined overhead rate of $260 per machine-hour was based on a cost formula that estimates $260,000of total manufactu

The overhead is applied to the production on the basis of pre determined overhead rate. The overhead…

Business

Accounting

Harwood Company uses a Job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $260 per machine-hour was based on a cost formula that estimates $260,00 of total manufacturing overhead for an estimated activity level of 100,000 machine-hours. Required: 1. Assume that during the year the company works only 95.000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work In Process accounts: Compute the amount of overhead cost that would be applied to Work In Process for the year and make the entry in your T-accounts. 2A Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account 28. Prepare a Joumal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

Harwood Company uses a Job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $260 per machine-hour was based on a cost formula that estimates $260,00 of total manufacturing overhead for an estimated activity level of 100,000 machine-hours. Required: 1. Assume that during the year the company works only 95.000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work In Process accounts: Compute the amount of overhead cost that would be applied to Work In Process for the year and make the entry in your T-accounts. 2A Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account 28. Prepare a Joumal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

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 1PA: Barnes Company uses a job order cost system. The following data summarize the operations related to...

See similar textbooks

Similar questions

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?
Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
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?
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?
Chester Company provided information on overhead for its three producing departments as follows: Overhead is applied on the basis of machine hours in Fabricating and direct labor hours in Assembly and in Finishing. Job #13-198 had total prime cost of 6,700. The job took 40 machine hours in Fabricating, 100 direct labor hours in Assembly, and 20 direct labor hours in Finishing. What is the total cost of Job# 13-198? a. 6,700.00 b. 1,523.20 c. 8,223.20 d. 7,383.20
Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.
Kenkel, Ltd. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 80,000. b. Requisitioned raw materials to production, 80,000. c. Distributed direct labor costs, 10,000. d. Factory overhead costs incurred, 60,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 225,000, on account.
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.
Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours