   Chapter 4, Problem 32BEB ### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

#### Solutions

Chapter
Section ### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem

# Use the following information for Brief Exercises 4-31 and 4-32:At the beginning of the year, Jonson Company estimated the following: Refer to the information for Jonson Company above. Jonson uses departmental overhead rates. In the firing department, overhead is applied on the basis of kiln hours (number of hours spent in the gas-fired kiln). In the polishing department, overhead is applied on the basis of direct labor hours. Actual data for the month of July are as follows: Brief Exercise 4-32 Convert Departmental Data to Plantwide Data, Plantwide Overhead Rate, Apply Overhead to ProductionRefer to the information in Brief Exercise 4-31 for data. Now, assume that Jonson has decided to use a plantwide overhead rate based on direct labor hours.Required: 1. Calculate the predetermined plantwide overhead rate. (Note: Round to the nearest cent.) 2. Calculate the overhead applied to production for the month of July. 3. Calculate the overhead variance for the month of July.

1.

To determine

Calculate the predetermined plantwide overhead rate.

Explanation

The amount which is calculated at the beginning of the accounting year for a related activity by dividing the total estimated annual overhead by estimated annual activity level is known as the predetermined overhead rate.

Use the following formula to calculate predetermined plantwide overhead rate:

2.

To determine

Calculate the overhead applied to production for the month of July.

3.

To determine

Calculate the overhead variance for the month of July.

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