![Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)](https://www.bartleby.com/isbn_cover_images/9780134486826/9780134486826_largeCoverImage.gif)
Concept explainers
Using Excel to calculate a predetermined overhead allocation rate, journalize and
Download an Excel template for this problem online in MyAccountingLab or athttp://www.pearsonhighered.com/Horngren.
Cedar River Trikes manufactures three-wheeled bikes for adults The company allocates
Raw Materials Inventory | $ 25,000 |
Work-in-Process Inventory | 18,000 |
Finished Goods Inventory | 43,000 |
During June 2018, Cedar River actually used 1,100 machine hours.
Requirements
- Compute the predetermined overhead allocation rate for fiscal year 2018. Use the blue shaded areas for inputs.
- Use Excel to journalize the transactions in the general journal. The account titles are available when you click the down-arrow. Use the Increase Indent button on the Home tab to indent items.
- Enter the beginning balances for the inventories. Assume the rest of the accounts do not have beginning balances. Post the transactions to T-accounts. The balances in the T-accounts are automatically updated.
- Adjust the manufacturing overhead.
- Prepare the
journal entry . - Post to T-accounts.
- List the ending balances for Raw Materials Inventory, Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 19 Solutions
Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)
- 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 hoursarrow_forwardBumblebee Mobiles manufactures a line of cell phones. The management has identified the following overhead costs and related cost drivers for the coming year. The following were incurred in manufacturing two of their cell phones, Bubble and Burst, during the first quarter. REQUIREMENT Review the worksheet called ABC that follows these requirements. You have been asked to determine the cost of each product using an activity-based cost system. Note that the problem information is already entered into the Data Section of the ABC worksheet.arrow_forwardA local picnic table manufacturer has budgeted these overhead costs: They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown: Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities:arrow_forward
- Angler Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Direct labor hours Machine hours Overhead costs Multiple Choice O $15.60. O Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 3.4 machine hours in the Assembly Department, and 4.0 direct labor hours and 0.6 machine hours in the Finishing Department? $3.40 Assembly 190,000 DLH 390,000 MH $16.10. $ 390,000 Finishing) 149,000 DLH: 95,550 MH $ 581,100arrow_forwardMultiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Activity Setting up equipment $491,050 Ordering costs 336,600 Machine costs 898,800 Receiving 362,600 Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $843,000 $455,000 8,200 1,600 Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours $563,000 $459,000 15,600 6,800 360 6,900 23,900 3,200 The company's normal activity is 8,400 direct labor hours. Receiving hours 250 12,900 18,900 6,600 610 19,800 42,800 9,800arrow_forwardSparkle Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2020. Machine setup-hours is the only driver of manufacturing overhead costs. Sparkle has a set up capacity of 2,220 hours. (Click the icon to view the information.) Calculate the manufacturing overhead costs budget (label it Schedule 5). Schedule 5: Manufacturing Overhead Costs Budget for the Year Ending December 31, 2020 Machine Setup Overhead Costs Total manufacturing overhead costs Data table 1. Quantity of lamps to be produced 2. Number of lamps to be produced per batch 3. Setup time per batch Variable cost = $70 per setup-hour Fixed cost = - $79,000 Knox 21,000 lamps 50 lamps/batch 3 hours/batch Ayer 12,000 lamps 50 lamps/batch 4 hours/batch Xarrow_forward
- Using the pre-determined overhead rate calculated above, calculate the overhead that would be allocated to a product that uses 3.5 hours of machine time. What will happen if actual overhead costs turn out to be higher or lower than this calculation? predetermined overhead rate calculated above: $25/ hour of machine run timearrow_forwardHaywood Printing is processing a job with the following activity rates: Activity Cost Driver Driver Rate Direct labor Number of hours $8 Copying Number of copies $0.05 If this job requires 5 hours for 1,000 copies, what is the activity-based cost of the job?arrow_forwardeBook Print Item Activity-Based Costing HealthTec Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $32 per machine hour (mh) Assembly $16 per direct labor hour (dlh) Setup $50 per setup Inspecting $29 per inspection Production scheduling $19 per production order Purchasing $6 per purchase order The activity-base usage quantities and units produced for each product were as follows: Stationary Bicycle Treadmill Machine hours 1,870 950 Direct labor hours 460 170 Setups 30 10 Inspections 660 340 Production orders 40 50 Purchase orders 160 140 Units produced 1,000 1,000 Use the activity rate and usage…arrow_forward
- Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours.…arrow_forwardMagnify Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available the year 2020. Machine setup-hours is the only driver of manufacturing overhead costs. Magnify has a set up capacity of 1,0 hours. (Click the icon to view the information.) Calculate the manufacturing overhead costs budget (label it Schedule 5). Schedule 5: Manufacturing Overhead Costs Budget for the Year Ending December 31, 2020 Machine Setup Overhead Costs Total manufacturing overhead costs Data table 1. Quantity of lamps to be produced 2. Number of lamps to be produced per batch 3. Setup time per batch Variable cost = $65per setup-hour Fixed cost $78,000 = Print Knox 21,000 lamps 50 lamps/batch 2 hours/batch Done Ayer 15,000 lamps 200 lamps/batch 3 hours/batch Xarrow_forwardMultiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours.…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781111581565/9781111581565_smallCoverImage.gif)