In December 2016, Learer Company’s manager estimated next year’s
total direct labor cost assuming 35 persons working an average of
2,000 hours each at an average wage rate of $40 per hour. The
manager also estimated the following manufacturing overhead costs
for 2017.
Indirect labor | $ | 329,200 | |
Factory supervision | 354,000 | ||
Rent on factory building | 150,000 | ||
Factory utilities | 98,000 | ||
Factory insurance expired | 78,000 | ||
Depreciation—Factory equipment | 756,000 | ||
Repairs expense—Factory equipment | 70,000 | ||
Factory supplies used | 78,800 | ||
Miscellaneous production costs | 46,000 | ||
Total estimated overhead costs | $ | 1,960,000 | |
At the end of 2017, records show the company incurred $1,821,000 of
actual overhead costs. It completed and sold five jobs with the
following direct labor costs: Job 201, $614,000; Job 202, $573,000;
Job 203, $308,000; Job 204, $726,000; and Job 205, $324,000. In
addition, Job 206 is in process at the end of 2017 and had been
charged $27,000 for direct labor. No jobs were in process at the
end of 2016. The company’s predetermined overhead rate is based on
direct labor cost.
Required
1-a. Determine the predetermined overhead rate for
2017.
1-b. Determine the total overhead cost applied to
each of the six jobs during 2017.
1-c. Determine the over- or underapplied overhead
at year-end 2017.
2. Assuming that any over- or underapplied
overhead is not material, prepare the adjusting entry to allocate
any over- or underapplied overhead to Cost of Goods Sold at the end
of 2017.
In December 2016, Learer Company’s manager estimated next year’s total direct labor cost assuming 35 persons...
In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 40 persons working an average of 3,000 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for 2017 Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 336,200 276,000 157,000 105,000 85,000 625,000 77,000 85,800...
In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $25 per hour. The manager also estimated the following manufacturing overhead costs for 2017. Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 319,200 240,000 140,000 88,000 68,000 480,000 60,000 68,800...
Quiz Saved In December 2016. Learer Company's manager estimated next year's total direct labor cost assuming 40 persons working an average of 2,000 hours each at an average wage rate of $25 per hour. The manager also estimated the following manufacturing overhead costs for 2017 Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation Factory equipment Repairs expense- Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 327,200 149,000 148,00 96,000...
In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 40 persons working an average of 2,000 hours each at an average wage rate of $30 per hour. The manager also estimated the following manufacturing overhead costs for 2017. Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Pactory supplies used Miscellaneous production costs Total estimated overhead coats $ 332,200 243,000 103,000 101,000 81,000 496,000 73,000 81,800...
In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 55 persons working an average of 2.000 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for 2017 Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 261,200 156,000 152, eee 1ee, eee se, eee...
In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 40 persons working an average of 3,000 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for 2017 Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 336,200 276,000 157,000 105,000 85,000 625,000 77,000 85,800...
In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 40 persons working an average of 3,000 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for 2017 Indirect labor $ 316, 200 Factory supervision 188,800 Rent on factory building 147,000 Factory utilities 95,000 Factory insurance expired 75, eee Depreciation-Factory equipment 521,000 Repairs expense-Factory equipment 67,000 Factory supplies used 75,800 Miscellaneous production costs 43,000 Total...
1 In December 2016, Learer Company's manager estimated next year's total direct labor cost assuming 50 persons working an average of 2,500 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for 2017 Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs Total estimated overhead costs $ 333,200 128,000 154,000 102,000 82,000 494,000 74,000...
At the beginning of the year, Learer Company’s manager estimated total direct labor cost assuming 40 persons working an average of 2,000 hours each at an average wage rate of $40 per hour. The manager also estimated the following manufacturing overhead costs for the year. Indirect labor $ 324,200 Factory supervision 355,000 Rent on factory building 145,000 Factory utilities 93,000 Factory insurance expired 73,000 Depreciation—Factory equipment 750,000 Repairs expense—Factory equipment 65,000 Factory supplies used 73,800 Miscellaneous production costs 41,000 Total...
13 overhead rate LO P3, P4 2016, Learer Company's manager estimated next year's total direct labor cost assuming 45 persons working an average of 2,000 hours each at an average wage rate of $25 per hours The manager also estimated the following manufacturing over points costs for 2017. Factory supervision Rent on factory bullding 94,0 Factory insurance expired Repairs expense-Factory equipeent Factory supplies used Miscellaneous production costs Total estinated averhead costs 66,000 At the end of 2017, records show the...