HORNGREN'S COST ACCT-MYACCTLAB ACCESS
16th Edition
ISBN: 9781323818923
Author: Datar
Publisher: PEARSON
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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…
What is the adjusted cost of goods sold?Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $120,400 of manufacturing overhead for an estimated allocation base of $86,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:Purchase of raw materials $ 133,000Direct labor cost $ 82,000Manufacturing overhead costs:Indirect labor $ 118,600Property taxes $ 8,000Depreciation of equipment $ 18,000Maintenance $ 15,000Insurance $ 9,700Rent, building $ 39,000Beginning EndingRaw Materials $ 26,000 $ 13,000Work in Process $ 44,000 $ 40,000Finished Goods $ 71,000 $ 60,000
SMC Inc. employs Just-in-Time and Backflush Costing Systems for the production of goods for the year ended December 31, 2016. The following transactions summarize the major steps in SMC's production during the year of 2016:a. Raw materials received from suppliers amounted to P4,000.b. Direct labor costs of P10,400 and overhead costs of P7,800 were incurred and applied, respectively, during the year of 2016.c. The cost of work-in-process at December 31, 2016 was P3,600, This cost was determined through the production report and is composed of the following elements of costDirect materials 1,500 Direct labor 1,200 Overhead 900d. In addition, the finished goods inventory at December 31, 2016 was P6,500 consisting ofDirect materials 1.500 Direct labor 2,850 Overhead 2,150Requirements:1. What is the amount of direct materials backflushed from raw and in process account to finished goods?2. What is the amount of direct materials backflushed from finished goods to cost of goods sold?3. What…
Chapter 4 Solutions
HORNGREN'S COST ACCT-MYACCTLAB ACCESS
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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