Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Chapter 3, Problem 4E
(a)
To determine
It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.
To Identify: The predetermined factory overhead rate based on direct labor cost of Company KB.
(b)
To determine
To Prepare: The
(c)
To determine
To Identify: The ending balance of factory overhead – blending department of Company KS.
(d)
To determine
To Identify: the factory overhead would be over applied or under applied of Company KS.
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Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance
The chief cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $3,000,000 and total direct labor costs would be $2,400,000. During May, the actual direct labor cost totaled $198,400 and factory overhead cost incurred totaled $253,200.
a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals.
Identify the activity base for this company. Remember to enter the number as a whole percent not in decimals.
b. Journalize the entry to apply factory overhead to production for May.
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Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be
$3,150,000, and total direct labor costs would be $1,800,000. During February, the actual direct labor cost totaled $160,000, and factory overhead cost incurred totaled $283,900.
a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals.
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b. Journalize the entry to apply factory overhead to production for February. If an amount box does not require an entry, leave it blank.
c. What is the February 28 balance of the account Factory Overhead-Blending Department?
Amount:
Debit or Credit?
d. Does the balance in part (c) represent overapplied or underapplied factory overhead?
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Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance
The cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $817,700, and total direct labor costs would be $629,000. During May, the actual direct labor cost totaled $54,000, and factory overhead cost incurred totaled $73,000.
a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals.
Chapter 3 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 3 - Which type of cost system, process or job order,...Ch. 3 - In job order cost accounting, the three elements...Ch. 3 - In a job order cost system, direct labor and...Ch. 3 - Why is the cost per equivalent unit often...Ch. 3 - What is the purpose for determining the cost per...Ch. 3 - Rameriz Company is a process manufacturer with two...Ch. 3 - What is the most important purpose of the cost of...Ch. 3 - How are cost of production reports used for...Ch. 3 - Prob. 9DQCh. 3 - Job order versus process costing Which of the...
Ch. 3 - Prob. 2BECh. 3 - Prob. 3BECh. 3 - Equivalent units of conversion costs The Rolling...Ch. 3 - Prob. 5BECh. 3 - Prob. 6BECh. 3 - Prob. 7BECh. 3 - Prob. 8BECh. 3 - Entries for materials cost flows in a process cost...Ch. 3 - Flowchart of accounts related to service and...Ch. 3 - Entries for flow of factory costs for process cost...Ch. 3 - Prob. 4ECh. 3 - Equivalent units of production The Converting...Ch. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Costs per equivalent unit Georgia Products Inc....Ch. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Errors in equivalent unit computation Napco...Ch. 3 - Cost per equivalent unit The following information...Ch. 3 - Costs per equivalent unit and production costs...Ch. 3 - Cost of production report The debits to Work in...Ch. 3 - Cost of Production report The Cutting Department...Ch. 3 - Prob. 18ECh. 3 - Prob. 19ECh. 3 - Prob. 20ECh. 3 - Lean manufacturing The following are some quotes...Ch. 3 - The Converting Department of Tender Soft Tissue...Ch. 3 - Prob. 23ECh. 3 - Prob. 24ECh. 3 - Prob. 25ECh. 3 - Prob. 26ECh. 3 - Prob. 27ECh. 3 - Prob. 28ECh. 3 - Entries for process cost system Port Ormond Carpet...Ch. 3 - Cost of production report Hana Coffee Company...Ch. 3 - Equivalent units and related costs; cost of...Ch. 3 - Work in process account data for two months; cost...Ch. 3 - Sunrise Coffee Company roasts and packs coffee...Ch. 3 - Entries for process cost system Preston Grover...Ch. 3 - Cost of production report Bavarian Chocolate...Ch. 3 - Equivalent units and related costs; cost of...Ch. 3 - Work in process account data for two months; cost...Ch. 3 - Prob. 5PBCh. 3 - Analyzing process cost elements across product...Ch. 3 - Analyzing process cost elements over time Pix...Ch. 3 - Determining cost relationships Midst ate...Ch. 3 - Ethics in Action You are the Cookie division...Ch. 3 - Communications Jamarcus Bradshaw, plant manager of...
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- 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.arrow_forwardCost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant: During July, the direct labor cost was 43,500, raw materials purchases were 64,000, and the total overhead cost was 108,750. The inventories at the end of July were: Required: 1. What is the cost of the direct materials used in production during July? 2. What is the cost of goods manufactured for July? 3. What is the cost of goods sold for July?arrow_forwardAbbey Products Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, 60,000; estimated materials costs, 50,000; estimated direct labor costs, 60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for November was 80,000, and the production statistics on November 30 are as follows: Required: 1. Compute the predetermined rate, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why?arrow_forward
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