Problem 4-49 Application of Overhead; Cost FlowsHaughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on directlabor costs to apply factory overhead to all jobs. During the month of July, the firm processed three jobs: X13, X14, and X15, ofwhich X13 was started in June.DataJuly 1$36,500$41,000InventoriesJuly 31Direct MaterialsWork in ProcessFinished Goods$0$0Cost of Goods Sold, JulyDirect Materials Purchased, July$55,000Labor hoursMaterialsusedStatusJob X13Job X14Job X15$16,380$24,220$14,0003,5002,8001,600CompletedIn processingIn processingIndirect labor6,900$444.000Total$54.600Other factory overhead costs:$131,500$180,600$188,500$131,100$56.000$687,700RentUtilityRepairs and maintenanceDepreciationOtherApplied Overhead$900,600 Require1. Compute the predetermined factory overhead rate.2. Compute the amount of the Direct Materials account at the end of July.3. Compute the actual factory overhead cost incurred during the month of July.4. Compute the ending balance of the work-in-process inventory account for July.5. Prepare the statement cost of goods manufactured for July.6. Compute the amount of over- or under-applied overhead.7. What is the cost per unit of Job X13 if it has a total of 100 units?8. Prepare the statement of cost of goods sold for July.

Name: Problem 4-49 Application of Overhead; Cost FlowsHaughton Company uses
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Problem 4-49 Application of Overhead; Cost FlowsHaughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on directlabor costs to apply factory overhead to all jobs. During the month of July,

Predetermined overhead rate is a rate which is calculated in advance before the actual production…

Business

Accounting

Problem 4-49 Application of Overhead; Cost Flows Haughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on direct labor costs to apply factory overhead to all jobs. During the month of July, the firm processed three jobs: X13, X14, and X15, of which X13 was started in June. Data July 1 $36,500 $41,000 $0 Inventories July 31 Direct Materials Work in Process Finished Goods $0 Cost of Goods Sold, July Direct Materials Purchas ed, July $55,000 Labor hours Job X13 Job X14 Job X15 Indirect labor Total Materials $16,380 $24,220 $14,000 used 3,500 2,800 1,600 6.900 $444.000 Status Completed In processing In processing $54,600 Other factory overhead costs: Rent Utility Repairs and maintenance Depreciation Other $131,500 $180,600 $188,500 $131, 100 $56.000 $687,700 Applied Overhead $900,600

Problem 4-49 Application of Overhead; Cost Flows Haughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on direct labor costs to apply factory overhead to all jobs. During the month of July, the firm processed three jobs: X13, X14, and X15, of which X13 was started in June. Data July 1 $36,500 $41,000 $0 Inventories July 31 Direct Materials Work in Process Finished Goods $0 Cost of Goods Sold, July Direct Materials Purchas ed, July $55,000 Labor hours Job X13 Job X14 Job X15 Indirect labor Total Materials $16,380 $24,220 $14,000 used 3,500 2,800 1,600 6.900 $444.000 Status Completed In processing In processing $54,600 Other factory overhead costs: Rent Utility Repairs and maintenance Depreciation Other $131,500 $180,600 $188,500 $131, 100 $56.000 $687,700 Applied Overhead $900,600

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...

See similar textbooks

Similar questions

(Appendix 4A) Journal Entries, Job Costs The following transactions occurred during the month of April for Nelson Company: a. Purchased materials costing 4,610 on account. b. Requisitioned materials totaling 4,800 for use in production, 3,170 for Job 518 and the remainder for Job 519. c. Recorded 65 hours of direct labor on Job 518 and 90 hours on Job 519 for the month. Direct laborers are paid at the rate of 14 per hour. d. Applied overhead using a plantwide rate of 6.20 per direct labor hour. e. Incurred and paid in cash actual overhead for the month of 973. f. Completed and transferred Job 518 to Finished Goods. g. Sold on account Job 517, which had been completed and transferred to Finished Goods in March, for cost (2,770) plus 25%. Required: 1. Prepare journal entries for Transactions a through e. 2. Prepare job-order cost sheets for Jobs 518 and 519. Prepare journal entries for Transactions f and g. (Note: Round to the nearest dollar.) 3. Prepare a schedule of cost of goods manufactured for April. Assume that the beginning balance in the raw materials account was 1,025 and that the beginning balance in the work-in-process account was zero.
JOB ORDER COSTING TRANSACTIONS D K Enterprises makes wicker baskets. During the month of August, the company had four job orders: 501, 502, 503, and 504. Overhead was applied at predetermined rates, while actual factory overhead was recorded as incurred. All four jobs were completed. (a) Purchased raw materials on account, 44,000. (b) Issued direct materials to production: (c) Issued indirect materials to production, 5,000. (d) Incurred direct labor costs: (e) Charged indirect labor to production, 3,300. (f) Paid electricity, heating oil, and repair bills for the factory and charged to production, 5,200. (g) Applied factory overhead to each of the jobs using a predetermined factory overhead rate as follows: (h) Finished Job Nos. 501-504 and transferred to the finished goods inventory account as products W, X, Y, and Z, respectively. (i) Sold products W, X, Y, and Z for 17,500, 18,000, 16,900, and 19,000, respectively. REQUIRED 1. Prepare general journal entries to record transactions (a) through (i). Make compound entries for (b), (d), and (g), with separate debits for each job. 2. Post the entries to the work in process and finished goods T accounts only.
Predetermined factory overhead rate Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. A. Determine the predetermined operating room overhead rate for the year. B. Bill Harris had a five-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (A)? C. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were 67,250. Determine the overhead under- or overapplied for the period.
JOB ORDER COSTING WITH UNDER- AND OVERAPPLIED FACTORY OVERHEAD M. Evans Sons manufactures parts for radios. For each job order, it maintains ledger sheets on which it records direct labor, direct materials, and factory overhead applied. The factory overhead control account contains postings of actual overhead costs. At the end of the month, the under- or over applied factory overhead is charged to the cost of goods sold account. Factory overhead is applied on the basis of direct labor hours. For Job Nos. 101, 102,103, and 104, direct labor hours are 12, 000, 10,000, 11, 000, and 18,000, respectively. The overhead application rate is 1.20/direct labor hour. (a) Purchased raw materials on account, 50,000. (b) Issued direct materials: (c) Issued indirect materials to production, 8,000. (d) Incurred direct labor costs: (e) Charged indirect labor to production, 15,000. (f) Paid electricity bill, taxes, and repair fees for the factory and charged to production, 8,000. (g) Depreciation expense on factory equipment, 30,000. (h) Applied factory overhead to Job Nos. 101104 using the predetermined factory overhead rate (see above). (i) Finished Job Nos. 101103 and transferred to the finished goods inventory account as products N, O, and P. (j) Sold products N and for 50,000 and 45,400, respectively. (k) Transferred under- or over applied factory overhead balance to the cost of goods sold account. REQUIRED 1. Prepare general journal entries to record transactions (a) through (k). 2. Post the entries to the work in process and finished goods accounts only and determine the ending balances in these accounts. 3. Compute the balance in the job cost ledger and verify that this balance agrees with that in the work in process control account.
Overhead Assignment: Actual and Normal Activity Compared Reynolds Printing Company specializes in wedding announcements. Reynolds uses an actual job-order costing system. An actual overhead rate is calculated at the end of each month using actual direct labor hours and overhead for the month. Once the actual cost of a job is determined, the customer is billed at actual cost plus 50%. During April, Mrs. Lucky, a good friend of owner Jane Reynolds, ordered three sets of wedding announcements to be delivered May 10, June 10, and July 10, respectively. Reynolds scheduled production for each order on May 7, June 7, and July 7, respectively. The orders were assigned job numbers 115, 116, and 117, respectively. Reynolds assured Mrs. Lucky that she would attend each of her daughters weddings. Out of sympathy and friendship, she also offered a lower price. Instead of cost plus 50%, she gave her a special price of cost plus 25%. Additionally, she agreed to wait until the final wedding to bill for the three jobs. On August 15, Reynolds asked her accountant to bring her the completed job-order cost sheets for Jobs 115, 116, and 117. She also gave instructions to lower the price as had been agreed upon. The cost sheets revealed the following information: Reynolds could not understand why the overhead costs assigned to Jobs 116 and 117 were so much higher than those for Job 115. She asked for an overhead cost summary sheet for the months of May, June, and July, which showed that actual overhead costs were 20,000 each month. She also discovered that direct labor hours worked on all jobs were 500 hours in May and 250 hours each in June and July. Required: 1. How do you think Mrs. Lucky will feel when she receives the bill for the three sets of wedding announcements? 2. Explain how the overhead costs were assigned to each job. 3. Assume that Reynoldss average activity is 500 hours per month and that the company usually experiences overhead costs of 240,000 each year. Can you recommend a better way to assign overhead costs to jobs? Recompute the cost of each job and its price, given your method of overhead cost assignment. Which method do you think is best? Why?
Applying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000 for the year. Direct labor hours are estimated to be 80,000. For Bergan Company, (A) determine the predetermined factory overhead rate using direct labor hours as the activity base, (B) determine the amount of factory overhead applied to Jobs 200 and 305 in May using the data on direct labor hours from BE 16-2, and (C) prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate.