Park Industries manufactures custom-designed playground equipment for schools and city parks. Park expected to incur S784,700of manufacturing overhead cost, 41,300 of direct labor hours, and S1,073,800 of direct labor cost during the year (the cost of directlabor is $26 per hour). The company allocates manufacturing overhead on the basis of direct labor nours. During August, Parkcompleted Job 306. The job used 165 direct labor hours and required S12,700 of direct materials. The City of Jonestown hascontracted to purchase the playground equipment at a price of 27% over manufacturing cost. Reac the requirements RequirementFirst identify the formulathen calculate the predetermined overhead rate. Estimatedyearly overhead costs Estimated yearly direct labor hours - Predetermined overhead rate per hour

Name: Park Industries manufactures custom-designed playground equipment for
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Description: Park Industries manufactures custom-designed playground equipment for schools and city parks. Park expected to incur S784,700of manufacturing overhead cost, 41,300 of direct labor hours, and S1,073,800 of direct labor cost during the year (the cost

Predetermined OH Rate is the one that is calculated to apply the Mfg. OH incurred to the jobs or…

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Park Industries manufactures custom-designed playground equipment for sc of manufacturing overhead cost 41,300 of direct labor hours, and $1,073,800

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 2PA: York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of...

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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?
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.
Luna Manufacturing Inc. completed Job 2525 on May 31, and there were no jobs in process in the plant. Prior to June 1, the predetermined overhead application rate for June was computed from the following data, based on an estimate of 5,000 direct labor hours: The factory has one production department and uses the direct labor hour method to apply factory overhead. Three jobs are started during the month, and postings are made daily to the job cost sheets from the materials requisitions and labor-time records. The following schedule shows the jobs and amounts posted to the job cost sheets: The factory overhead control account was debited during the month for actual factory overhead expenses of 27,000. On June 11, Job 2526 was completed and delivered to the customer using a mark-on percentage of 50% on manufacturing cost. On June 24, Job 2527 was completed and transferred to Finished Goods. On June 30, Job 2528 was still in process. Required: 1. Prepare job cost sheets for Jobs 2526, 2527, and 2528, including factory overhead applied when the job was completed or at the end of the month for partially completed jobs. 2. Prepare journal entries as of June 30 for the following: a. Applying factory overhead to production. b. Closing the applied factory overhead account. c. Closing the factory overhead account. d. Transferring the cost of the completed jobs to finished goods. e. Recording the cost of the sale and the sale of Job 2526.
Rockford Company has four departmental accounts: Building Maintenance, General Factory Overhead, Machining, and Assembly. The direct labor hour method is used to apply factory overhead to the jobs being worked on in Machining and Assembly. The company expects each production department to use 30,000 direct labor hours during the year. The estimated overhead rates for the year include the following: During the year, both Machining and Assembly used 28,000 direct labor hours. Factory overhead costs incurred during the year follow: In determining application rates at the beginning of the year, cost allocations were made as follows, using the sequential distribution method: Building Maintenance to: General Factory Overhead, 10%; Machining, 50%; Assembly, 40%. General factory overhead was distributed according to direct labor hours. Required: Determine the under- or overapplied overhead for each production department. (Hint: First you must distribute the service department costs.)
Pocono Cement Forms expects $900,000 in overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 60,000 or its expected machine hours of 30,000. Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 90 direct labor hours, and 75 machine hours. Wages are paid at $16 per hour.
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?
Cozy, Inc., manufactures small and large blankets. It estimates $950,000 in overhead during the manufacturing of 360,000 small blankets and 120,000 large blankets. What is the predetermined overhead rate if a small blanket takes 2 hours of direct labor and a large blanket takes 3 hours of direct labor?
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?
Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and administrative costs next year. Direct labor costs at 5 per hour are expected to total 50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? a. 120 b. 260 c. 28 d. 140
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
Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
When setting its predetermined overhead application race, Tasty Box Meals estimated its overhead would be $100,000 and would require 25,000 machine hours in the next year. At the end of the year. It found that actual overhead was $102,000 and required 26,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under applied or over applied overhead.