Smith, Inc. uses a predetermined overhead allocation rate of 60% of direct labor costs. In January, Smith completed Job 22, which had direct labor costs of $1,700 and Job 33
Smith, Inc. uses a predetermined overhead allocation rate of 60% of direct labor costs. In January, Smith completed Job 22, which had direct labor costs of $1,700 and Job 33
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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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Question
Smith, Inc. uses a predetermined overhead allocation rate of
journal entry for allocated manufacturing overhead costs for both jobs would be:
60%
of direct labor costs. In January, Smith completed Job 22, which had direct labor costs of
$1,700
and Job 33 which had direct labor costs of
$3,900.
The
Manufacturing Overhead
|
2,340
|
|
Work−in−Process
Inventory |
|
2,340
|
Manufacturing Overhead
|
3,360
|
|
Work−in−Process
Inventory |
|
3,360
|
Work−in−Process
Inventory |
2,340
|
|
Manufacturing Overhead
|
|
2,340
|
Work−in−Process
Inventory |
3,360
|
|
Manufacturing Overhead
|
|
3,360
|
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