1. It is a case of Under-allocation of Manufacturing overhead thus reflecting an excess of Actual cost incurred vis-a-vis the Standard output produced. This is primarily due to less than optimal use of resources generating the output units.
To avoid the under-allocation a more efficient mechanism should be adopted. This can mean increase in productivity for Indirect Materials, Indirect Labour and Machine hours. The higher Production/Output rate can absorb a higher amount of overheads, thus eliminating the Under-allocation.
2. There are several factors that cannot be influenced by the Operation Manager on the floor. One such example is the Depreciation of Machinery included in the Manufacturing overhead. This being a period cost is fixed per period.
On page 135 of the book there is a discussion about the use of predetermined overhead...
Exercise # 5-7
Required! 2 Compute the amount of underapplied or overapplied overhead cost IUI I J Prepare a schedule of cost of goods manufactured for the year. EXERCISE 5-7 Prepare T-Accounts (L04, LO6] Granger Products recorded the following transactions for the just completed month. The company had no beginning inventories: a $75,000 in raw materials was purchased for cash. be $73.000 in raw materials was requisitioned for use in production. Of this amount, $67,000 was for direct materials and...
Exercise 2-2 Apply Overhead Cost to Jobs [LO2-2] Luthan Company uses a plantwide predetermined overhead rate of $22.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $265,200 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $270,000 and 12,600 total direct labor-hours during the period. Required Determine the amount of manufacturing overhead cost that would have been applied to all...
Work-in-Process Inventory for Carston Inc. at the beginning of
the year was a single job, Job T114:
Work-in-Process Inventory for Carston Inc. at the beginning of the year was a single job, Job T114: Direct Direct Job # Materials Labor Overhead Total $ 16,250 $ 76,500 $ 31,500 T114 $28,750 The company's budgeted costs for the year are as follows: Budgeted overhead Variable $ 68,000 Indirect materials Indirect labor 56,000 28,000 Employee benefits Fixed Supervision Depreciation 13,000 15,000 $180,000 Total...
please answer both questions
More Info a. Incurred and paid Web site expenses, $2,300. b. Incurred manufacturing wages of $10,000, 65% of which was direct labor and 35% of which was indirect labor. c. Purchased raw materials on account, $19,000 d. Used in production: direct materials, $8,000; indirect materials, $3,500 e. Recorded manufacturing overhead: depreciation on plant, $17,000; plant insurance (previously paid), $1,600; plant property tax, $3,700 (credit Property Tax Payable) f. Allocated manufacturing overhead to jobs, 150% of direct...
Smith Foundry uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the machine hours required. At the beginning of the year, the company expected to incur the following: (Click the icon to view the costs.) Smith's accountant found an error in the expense records from the year reported. Depreciation on manufacturing plant and equipment was actually $415,000, not the $490,000 that had originally been reported. The unadjusted Cost of Goods Sold balance at year-end was...
P2.1A (LO 1,2,3,4,5), AP Lott Company uses a job order cost system and applies overhead to produc- tion on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job 49 had been completed at a cost of $90,000 and was part of finished goods...
5. Plastic Products Company manufactures pipes and applies manufacturing costs to production at a predetermined overhead rate of $12 per direct labor-hour. The following data are obtained from the accounting records for June: Direct materials Direct labor (16,000 hours @ $11/hour) Indirect labor Plant facility rent Depreciation on plant machinery and equipment Sales commissions Administrative expenses Sales revenue Cost of goods sold (before adjustment for over/under applied overhead) $350,000 176,000 20,000 100,000 40,000 50,000 60,000 1,200,000 360,000 Required: a. What...
Jurvin Enterprises is a manufacturing company that had no
beginning inventories. A subset of the transactions that it
recorded during a recent month is shown below.
$75,400 in raw materials were purchased for cash.
$72,100 in raw materials were used in production. Of this
amount, $66,400 was for direct materials and the remainder was for
indirect materials.
Total labor wages of $151,500 were incurred and paid. Of this
amount, $133,000 was for direct labor and the remainder was for
indirect...
all one question just matching!!! thank you!!! itll help a lot
especially since i dont have enough funds for the book!!!
Manufacturing overhead allocated is less than the actual manufacturing overhead Debited for the amount of indirect materials requisitioned for jobs Account debited when raw materials are purchased 1 Process costing 2 Job costing DODDODD Used to accumulate direct materials, direct labor and manufacturing overhead allocated to a job 3. Job cost record Records the time spent by each employee...
Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below. $76,000 in raw materials were purchased for cash. $71,700 in raw materials were used in production. Of this amount, $66,600 was for direct materials and the remainder was for indirect materials. Total labor wages of $151,300 were incurred and paid. Of this amount, $133,600 was for direct labor and the remainder was for indirect...