Madelyn Company manufactures unique, custom-made furniture. The company usesa job order system and applies overhead to production on the basis of direct laborcost. In computing a predetermined overhead rate for the year 2019, the companyestimated manufacturing overhead to be P26 million and direct labor costs to be P20million.Actual costs incurred during 2019Direct materinls usedDirect labor cost incurredInsurance- factory equipmentIndirect laborP 30,000.00018,000,000500,0007,500,0002,000,00011,000,0002,000,000Factory maintenanceRent- factory buildingDepreciation- factory equipment Instructions - Answer each of the following1. Why is Madelyn Company using a job order cost system?2. On what basis does the company allocate its manufacturing overhead?Compute the predetermined overhead rate for 2019.3. Compute the amount of the under- or over applied overhead for 2019.4. Determine the cost of goods sold given the following dataJanuary 1, 2019P 5,000,00013,000,000December 31, 2019Work in processFinished goodsP 4,000,00011,000,000

Name: Madelyn Company manufactures unique, custom-made furniture. The compa
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Description: Madelyn Company manufactures unique, custom-made furniture. The company usesa job order system and applies overhead to production on the basis of direct laborcost. In computing a predetermined overhead rate for the year 2019, the companyestimated ma

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Accounting

Instructions - Answer each of the following 1. Why is Madelyn Company using a job order cost system? 2. On what basis does the company allocate its manufacturing overhead? Compute the predetermined overhead rate for 2019. 3. Compute the amount of the under- or over applied overhead for 2019.

Instructions - Answer each of the following 1. Why is Madelyn Company using a job order cost system? 2. On what basis does the company allocate its manufacturing overhead? Compute the predetermined overhead rate for 2019. 3. Compute the amount of the under- or over applied overhead for 2019.

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 10E: Compute the total job cost for each of the following scenarios: a. If the direct labor cost method...

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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?
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