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Sandhill Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies manufacturing overhead to production using a predetermined rate. This overhead rate is set at the beginning of each fiscal year by forecasting the year's overhead and relating it to direct labour costs. The budget for 2022 was as follows: Direct labour Manufacturing overhead $1,805,000 902.500 As at the end of the year, two jobs were incomplete. These were 17688, with total direct labour charges of $110,500, and 1819C, with total direct labour charges of $390,600. Machine hours were 287 hours for 17688 and 647 hours for 1819C. Direct materials issued for 17688 amounted to $221,000, and for 1819C they amounted to $420,600. Total charges to the Manufacturing Overhead Control account for the year were $903.500, and direct labour charges made to all jobs amounted to $1,582,000, representing 247,500 direct labour hours. There were no beginning inventories. In addition to the ending work in process just described, the ending finished goods inventory account showed a balance of $557,300. Sales for the year amounted to $6.201.300: cost of goods sold totalled $3,622,450; and sales, general, and administrative expenses were $1,851.800. The above amounts for inventories and the cost of goods sold have not been adjusted for any over-or under-application of manufacturing overhead to production. It is the company's practice to allocate any over-or under-applied overhead to inventories and the cost of goods sold.

Sandhill Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies manufacturing overhead to production using a predetermined rate. This overhead rate is set at the beginning of each fiscal year by forecasting the year's overhead and relating it to direct labour costs. The budget for 2022 was as follows: Direct labour Manufacturing overhead $1,805,000 902.500 As at the end of the year, two jobs were incomplete. These were 17688, with total direct labour charges of $110,500, and 1819C, with total direct labour charges of $390,600. Machine hours were 287 hours for 17688 and 647 hours for 1819C. Direct materials issued for 17688 amounted to $221,000, and for 1819C they amounted to $420,600. Total charges to the Manufacturing Overhead Control account for the year were $903.500, and direct labour charges made to all jobs amounted to $1,582,000, representing 247,500 direct labour hours. There were no beginning inventories. In addition to the ending work in process just described, the ending finished goods inventory account showed a balance of $557,300. Sales for the year amounted to $6.201.300: cost of goods sold totalled $3,622,450; and sales, general, and administrative expenses were $1,851.800. The above amounts for inventories and the cost of goods sold have not been adjusted for any over-or under-application of manufacturing overhead to production. It is the company's practice to allocate any over-or under-applied overhead to inventories and the cost of goods sold.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...
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Sandhill Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies. manufacturing overhead to production using a predetermined rate. This overhead rate is set at the beginning of each fiscal year by forecasting the year's overhead and relating it to direct labour costs. The budget for 2022 was as follows: Direct labour Manufacturing overhead $1,805,000 902,500 As at the end of the year, two jobs were incomplete. These were 17688, with total direct labour charges of $110,500, and 1819C, with total direct labour charges of $390,600. Machine hours were 287 hours for 17688 and 647 hours for 1819C. Direct materials issued for 17688 amounted to $221,000, and for 1819C they amounted to $420,600. Total charges to the Manufacturing Overhead Control account for the year were $903.500, and direct labour charges made to all jobs amounted to $1,582,000, representing 247,500 direct labour hours. There were no beginning inventories. In addition to the ending work in process just described, the ending finished goods inventory account showed a balance of $557,300. Sales for the year amounted to $6.201,300, cost of goods sold totalled $3,622,450; and sales, general, and administrative expenses were $1,851.800. The above amounts for inventories and the cost of goods sold have not been adjusted for any over-or under-application of manufacturing overhead to production. It is the company's practice to allocate any over-or under-applied overhead to inventories and the cost of goods sold.
Transcribed Image Text:Sandhill Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies. manufacturing overhead to production using a predetermined rate. This overhead rate is set at the beginning of each fiscal year by forecasting the year's overhead and relating it to direct labour costs. The budget for 2022 was as follows: Direct labour Manufacturing overhead $1,805,000 902,500 As at the end of the year, two jobs were incomplete. These were 17688, with total direct labour charges of $110,500, and 1819C, with total direct labour charges of $390,600. Machine hours were 287 hours for 17688 and 647 hours for 1819C. Direct materials issued for 17688 amounted to $221,000, and for 1819C they amounted to $420,600. Total charges to the Manufacturing Overhead Control account for the year were $903.500, and direct labour charges made to all jobs amounted to $1,582,000, representing 247,500 direct labour hours. There were no beginning inventories. In addition to the ending work in process just described, the ending finished goods inventory account showed a balance of $557,300. Sales for the year amounted to $6.201,300, cost of goods sold totalled $3,622,450; and sales, general, and administrative expenses were $1,851.800. The above amounts for inventories and the cost of goods sold have not been adjusted for any over-or under-application of manufacturing overhead to production. It is the company's practice to allocate any over-or under-applied overhead to inventories and the cost of goods sold.
Prorate the amount calculated in part (a) based on the ending balances (before prorating) of Work in Process, Finished Goods, and Cost of Goods Sold. (Round allocation percentage to 2 decimal places, e.g. 15.25% and final answers to the nearest whole dollar, e.g. 5,275.) Cost of goods sold Finished goods inventory WIP inventory Total LA $ $ tA All
Transcribed Image Text:Prorate the amount calculated in part (a) based on the ending balances (before prorating) of Work in Process, Finished Goods, and Cost of Goods Sold. (Round allocation percentage to 2 decimal places, e.g. 15.25% and final answers to the nearest whole dollar, e.g. 5,275.) Cost of goods sold Finished goods inventory WIP inventory Total LA $ $ tA All
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