Question

Q1:

Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine hours. At the beginning of the year, management estimated that the company would incur 51,750,000 of factory overhead costs and use 70,000 machine hours. Erkens Company recorded the following events during the month of April: a. Purchased 202,000 pounds of materials on account; the cost was 54.50 per pound b. Issued 131,000 pounds of materials to production, of which 20,500 pounds were used as indirect c. Incurred direct labor costs of 5295,000 and $51,000 of indirect labor costs d. Recorded depreciation on equipment for the month, S77,900 e. Recorded insurance costs for the manufacturing property, S4,600. f. Paid $9,600 cash for utilities and other miscellaneous items for the manufacturing plant. g. Completed Job H11 costing $8,600 and Job G28 costing $82,500 during the month and transferred them to the Finished goods inventory account. h, Shipped Job G28 to the customer during the month. The job was invoiced at 35% above cost. i. Used 9,900 machine hours during April. Required: 1. Compute Erkens Company's predetermined overhead rate for the year etermined overhead rate 25 per machine hour 2. Prepare journal entries to record the events that occurred during April. (f no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 10 a. Purchased 202,000 pounds of materials on account: the cost was $4.50 per pound Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general jourmal 3-a. Compute the amount of overapplied or underapplied overhead.

Q2:


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Answer 1