Help QUESTION 10Shoes Wisely, Inc. allocates overhead using machine hours as the allocation base. The following information was estimated at the beginning of the year:Estimated Manufacturing OverheadEstimated Machine Hours$86,00014,00047,000Estimated Direct Labor HoursActual overhead totaled $72,000. During the year, the company produced 8,500 units of product using 14,000 machine hours and 60,000 direct labor hours. How much manufacturing overhead was allcoatedto the product during the year?Round your answer to whole dollars.

The company allocates the overhead basis machine hours. So, below is the calculation of…

Shoes Wisely, Inc. allocates overhead using machine hours as the allocation base. The following information was estimated at the beginning of the year: Estimated Manufacturing Overhead $86,000 14,000 Estimated Machine Hours Estimated Direct Labor Hours 47,000 Actual overhead totaled $72,000. During the year, the company produced 8,500 units of product using 14,000 machine hours and 60,000 direct labor hours. How much manufacturing overhead was allcoated to the product during the year?

Shoes Wisely, Inc. allocates overhead using machine hours as the allocation base. The following information was estimated at the beginning of the year: Estimated Manufacturing Overhead $86,000 14,000 Estimated Machine Hours Estimated Direct Labor Hours 47,000 Actual overhead totaled $72,000. During the year, the company produced 8,500 units of product using 14,000 machine hours and 60,000 direct labor hours. How much manufacturing overhead was allcoated to the product during the year?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 11PB: When setting its predetermined overhead application rate. Tasty Turtle estimated its overhead would...

See similar textbooks

Similar questions

(Appendix 4A) Overhead Application, Journal Entries, Job Cost At the beginning of the year, Smith Company budgeted overhead of 129,600 as well as 13,500 direct labor hours. During the year, Job K456 was completed with the following information: direct materials cost, 2,750; direct labor cost, 5,355. The average wage for Smith Company employees is 17 per hour. By the end of the year, 18,100 direct labor hours had actually been worked, and Smith incurred the following actual overhead costs for the year: Required: 1. Calculate the overhead rate for the year. 2. Calculate the total cost of Job K456. 3. Prepare the journal entries to record actual overhead and to apply overhead to production for the year. 4. Is overhead overapplied or underapplied? By how much? 5. Assuming that the normal cost of goods sold for the year is 635,600, what is the adjusted cost of goods sold?
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.
Event Forms expects $120,000 in overhead during the next year. It doesn't know whether it should apply overhead on the basis of its anticipated direct labor hours of 6,000 or its expected machine hours of 5,000. What would be the product cost under each predetermined allocation rate if the last job incurred $3,500 in direct material cost, 55 direct labor hours, and 55 machine hours? Wages are paid at $17 per hour.
PREDETERMINED FACTORY OVERHEAD RATE Millerlile Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 540,000. Total estimated direct labor hours are 50,000. Total estimated direct labor costs are 900,000. Total machine hours are estimated to be 80,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
When setting its predetermined overhead application rate. Tasty Turtle estimated its overhead would be $75,000 and manufacturing would require 25,000 machine hours in the next year. At the end of the year, it found that actual overhead was $74,000 and manufacturing required 24,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under- or over applied overhead.
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.
A company estimated 100,000 direct labor hours and $800,000 in overhead. The actual overhead was $805,100, and there were 99,900 direct labor hours. What is the predetermined overhead rate, and how much was applied during the year?
Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What do you think is a possible solution?
Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What did the engineer mean about the large overhead rate being a disadvantage when plating bids and seeking new business?