![MANAGERIAL ACCOUNTING FUND. W/CONNECT](https://www.bartleby.com/isbn_cover_images/9781259688713/9781259688713_largeCoverImage.gif)
MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 2, Problem 14E
In December 2014, Custom Mfg. established predetermined overhead for jobs produced during 2015 by using the following cost prediction: overhead cost, $750,000, and direct labor cost $625,000. At year-end 2015, the company’s records shoe that actual overhead costs for the year are $830,000. Actual direct labor cost had been assigned to jobs as follows.
- Determine the predetermined overhead rate for 2015.
- Set up a T-account for Factory Ovehead and enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate.
- Determine whether overhead is overapplied (and the amount) during the year.
- Prepare the
adjusting entry to allocate any over-or underapplied overhead to Cost of Goods Sold.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
In December 2014, Custom Mfg. established its predetermined overhead rate for jobs produced during year 2015 by using the following cost predictions: overhead costs, $400,000, and direct labor costs, $200,000. At year-end 2015, the company’s records show that actual overhead costs for the year are $1,049,200. Actual direct labor cost had been assigned to jobs as follows.
Jobs completed and sold
$
400,000
Jobs in finished goods inventory
74,000
Jobs in work in process inventory
46,000
Total actual direct labor cost
$
520,000
4.
Required information
1.
Determine the predetermined overhead rate for year 2015.
In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following
cost predictions: overhead costs, $750,000, and direct materials costs, $625,000. At year-end 2017, the company's records show that
actual overhead costs for the year are $830,000. Actual direct material cost had been assigned to jobs as follows.
Jobs completed and soldi
Jobs in finished goods inventory
Jobs in work in process inventory
Total actual direct materials cost
1. Determine the predetermined overhead rate for 2017.
2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and
determine whether overhead is overapplied or underapplied.
4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Complete this question by entering your answers in the tabs below.
View transaction list
Req 1
Req 2 and 3
Prepare the adjusting entry to allocate any over- or…
n December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $738,400 of overhead costs and $520,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56.
1.
What is the predetermined overhead rate for year 2015?
n December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $738,400 of overhead costs and $520,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56.
1.
What is the predetermined overhead rate for year 2015?
Chapter 2 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 2 - Prob. 1MCQCh. 2 - A company uses direct labor costs to apply...Ch. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQ
Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - What events cause debits to be recorded in the...Ch. 2 - GOOGLE Google applies overhead to product costs....Ch. 2 - Prob. 10DQCh. 2 -
11. Why must a company use predetermined...Ch. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 1QSCh. 2 - The left column lists the titles of documents and...Ch. 2 - Prob. 3QSCh. 2 - Prob. 4QSCh. 2 - Prob. 5QSCh. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - Prob. 8QSCh. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Prob. 11QSCh. 2 - Prob. 12QSCh. 2 - Prob. 13QSCh. 2 - Prob. 14QSCh. 2 - Prob. 1ECh. 2 - Prob. 2ECh. 2 - Exercise 15-13 Analysis of cost flows C2
As of the...Ch. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Exercise 15-7 Cost flows in a job order costing...Ch. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - Prob. 13ECh. 2 - In December 2014, Custom Mfg. established...Ch. 2 - In December 2014, Infodeo established its...Ch. 2 - Moonrise Bakery applies factory overhead based on...Ch. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 1PSACh. 2 - Bergamo Bays computer system generated the...Ch. 2 - Widmer Watercrafts predetermined overhead rate for...Ch. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 1PSBCh. 2 - Cavallo Mfg.s computer system generated the...Ch. 2 - Prob. 3PSBCh. 2 - In December 2014, Pavelka Companys manager...Ch. 2 - Prob. 5PSBCh. 2 - SERIAL PROBLEM Business Solutions P1 P2 P3 (This...Ch. 2 - Prob. 1GLPCh. 2 - Apples financial statements and notes in Appendix...Ch. 2 - Prob. 2BTNCh. 2 - Prob. 3BTNCh. 2 - COMMUNICATING IN PRACTICE C1 C2
BTN 15-4 Assume...Ch. 2 - Prob. 5BTNCh. 2 - Prob. 6BTNCh. 2 - Prob. 7BTNCh. 2 - Prob. 8BTNCh. 2 - Prob. 9BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Compute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.arrow_forwardWhen setting its predetermined overhead application race, Tasty Box Meals estimated its overhead would be $100,000 and would require 25,000 machine hours in the next year. At the end of the year. It found that actual overhead was $102,000 and required 26,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under applied or over applied overhead.arrow_forwardPlease use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forward
- Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: It estimates there will be five orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardWhen 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.arrow_forwardIf a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?arrow_forward
- In December 2016, Shire Computer’s management establishes the 2017 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in year 2017. During March 2017, Shire began and completed Job 13-56.1. What is the predetermined overhead rate for 2017?2. Using the information on the following job cost sheet, determine the total cost of the job.arrow_forwardMeed Company estimates the company will incur $65,000 in overhead costs and 5,000 direct labor hours during the year. Actual direct labor hours were 4,550. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base, and prepare the journal entry for the allocation of overhead. Calculate the predetermined overhead allocation rate. Fill in the labels and complete the formula below. Predetermined overhead ÷ = allocation rate ÷ = per direct labor hour Prepare the journal entry for the allocation of overhead. First, select the formula to calculate the overhead costs allocated. Fill in the labels and complete the formula below. × = Allocated overhead costs × = Prepare the journal entry for the allocation of overhead. Date Accounts and Explanation Debit Creditarrow_forwardAt the beginning of the year, Custom Manufacturing set its predetermined overhead rate using the following estimates: overhead costs, $1,100,000, and direct materials costs, $500,000.At year-end, the company reports that actual overhead costs for the year are $1,108,600. 1. Determine the predetermined overhead rate using estimated direct materials costs2. Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year.3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.arrow_forward
- Strong Company applies overhead based on machine hours. At the beginning of 2018, the company estimated that manufacturing overhead would be OMR 120,000, and machine hours would total 15,000. By 2018 year-end, actual overhead totaled OMR 140,000, and actual machine hours were 20,000. On the basis of this information, the 2018 predetermined overhead rate was:arrow_forward[The following information applies to the questions displayed below.] In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $1,800,000, and direct labor costs, $500,000. At year end 2013, the company's records show that actual overhead costs for the year are $1,608,800. Actual direct labor cost had been assigned to jobs as follows. Movies completed and 400,000 $4 released Movies still in production 50,000 Total actual direct labor $450,000 cost Exercise 15-14 Part 2&3 2&3.Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied (and the amount) during the year. Factory Overhead Applied overhead Actual overhead Overapplied overhead Applied overheadarrow_forwardMidwest Corporation has provided the following data concerning manufacturing overhead for 2020: Estimated manufacturing overhead for the year $ 30,000 Estimated direct labor hours for the year 2,000 Two jobs were worked on during the year: Job A-101 and Job A-102. The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,200 and 1,000, respectively. The actual manufacturing overhead was $37,000.What is the amount of the under- or overapplied manufacturing overhead? A $3,000 overapplied. B $4,000 underapplied. C $7,000 overapplied. D $1,000 underapplied.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegePrinciples of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY