EBK HORNGREN'S COST ACCOUNTING
16th Edition
ISBN: 9780134475998
Author: Rajan
Publisher: YUZU
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Textbook Question
Chapter 4, Problem 4.42P
General ledger relationships, under- and overallocation. (S. Sridhar adapted) Keezel Company uses normal costing in its
Additional information follows:
- a. Direct manufacturing labor wage rate was $15 per hour.
- b. Manufacturing
overhead was allocated at $20 per direct manufacturing labor-hour. - c. During the year sales revenues were $1,550,000, and marketing and distribution costs were $810,000.
- 1. What was the amount of direct materials issued to production during 2017?
Required
- 2. What was the amount of manufacturing overhead allocated to jobs during 2017?
- 3. What was the total cost of jobs completed during 2017?
- 4. What was the balance of work-in-process inventory on December 31, 2017?
- 5. What was the cost of goods sold before proration of under- or overallocated overhead?
- 6. What was the under- or overallocated manufacturing overhead in 2017?
- 7. Dispose of the under- or overallocated manufacturing overhead using the following:
- a. Write-off to Cost of Goods Sold
- b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold
- 8. Using each of the approaches in requirement 7, calculate Keezel’s operating income for 2017.
- 9. Which approach in requirement 7 do you recommend Keezel use? Explain your answer briefly.
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Students have asked these similar questions
Keezel Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Keezel for 2017 are as follows:
a.
Direct manufacturing labor wage rate was
$15
per hour.
b.
Manufacturing overhead was allocated at
$20
per direct manufacturing labor-hour.
c.
During the year, sales revenues were
$1,550,000,
and marketing and distribution costs were
$810,000.
Question
1.
What was the amount of direct materials issued to production during
2017?
2.
What was the amount of manufacturing overhead allocated to jobs during
2017?
3.
What was the total cost of jobs completed during
2017?
4.
What was the balance of work-in-process inventory on December 31,
2017?
5.
What was the cost of goods sold before proration of under- or overallocated overhead?
6.
What was the under- or overallocated manufacturing overhead in
2017?
7.
Dispose of the under- or overallocated…
Hamada company uses normal costing to
cost each job. Its job-costing system has two
direct-cost categories (direct materials and
direct manufacturing labor) and one indirect-
cost pool (manufacturing overhead, allocated
on the basis of direct manufacturing labor
costs). During 2020, Indirect manufacturing
labor cost incurred $1,300,000. The journal
entry is:
а.
Manufacturing Overhead Control debit
$1,300,000 and Materials Control credit
$1,300,000.
b.
Work-in-Process Control debit $1,300,000
and Wages payable control credit $1,300,000.
С.
Wages payable control debit $1,300,000 and
Manufacturing Overhead Control credit
$1,300,000.
d.
Wages payable control debit $1,300,000 and
Work-in-Process Control credit $1,300,000.
Hamada company uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs). During 2020, Indirect manufacturing labor cost incurred $1,300,000. The journal entry is:
a.
Work-in-Process Control debit $1,300,000 and Wages payable control credit $1,300,000.
b.
Manufacturing Overhead Control debit $1,300,000 and Materials Control credit $1,300,000.
c.
Wages payable control debit $1,300,000 and Work-in-Process Control credit $1,300,000.
d.
Wages payable control debit $1,300,000 and Manufacturing Overhead Control credit $1,300,000.
Chapter 4 Solutions
EBK HORNGREN'S COST ACCOUNTING
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Which of the following does not accurately...Ch. 4 - Sturdy Manufacturing Co. assembled the following...Ch. 4 - For which of the following industries would...Ch. 4 - ABC Company uses job-order costing and has...Ch. 4 - Under Stanford Corporations job costing system,...Ch. 4 - (10 min) Job costing, process costing. In each of...Ch. 4 - Actual costing, normal costing, accounting for...Ch. 4 - Job costing, normal and actual costing. Atkinson...Ch. 4 - Budgeted manufacturing overhead rate, allocated...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Job costing, consulting firm. Frontier Partners, a...Ch. 4 - Time period used to compute indirect cost rates....Ch. 4 - Accounting for manufacturing overhead. Creative...Ch. 4 - Job costing, journal entries. The University of...Ch. 4 - Journal entries, T-accounts, and source documents....Ch. 4 - Job costing, journal entries. Donald Transport...Ch. 4 - Job costing, unit cost, ending work in process....Ch. 4 - Job costing; actual, normal, and variation from...Ch. 4 - Job costing; variation on actual, normal, and...Ch. 4 - Proration of overhead. The Ride-On-Wave Company...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Service industry, job costing, law firm. Kidman ...Ch. 4 - Service industry, job costing, two direct- and two...Ch. 4 - Proration of overhead. (Z. Iqbal, adapted) The Zaf...Ch. 4 - Normal costing, overhead allocation, working...Ch. 4 - Proration of overhead with two indirect cost...Ch. 4 - General ledger relationships, under- and...Ch. 4 - Overview of general ledger relationships. Estevez...Ch. 4 - Allocation and proration of overhead. Resource...Ch. 4 - (2530 min.) Job costing, ethics. Joseph Underwood...Ch. 4 - Job costingservice industry. Market Pulse performs...
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