Pristine Painting Services uses a job order cost system
Pristine Painting Services uses a job order cost system to collect the costs of its home painting business. Each customer's house is treated as a separate job. Overhead is applied to each job based on the number of painting hours required for each house. Listed below are the data for the current year: $780,000 $772,450 39,000 38,750 Estimated overhead Actual overhead Estimated painting hours Actual painting hours The company uses Operating Overhead in place of Manufacturing Overhead. Instructions (a) (b) (c) (d) Compute the predetermined overhead rate. Prepare the entry to apply the overhead for the year. Determine whether the overhead was under- or overapplied and by how much. If estimated overhead increases to $799,500, discuss how this would impact (1) applied overhead and (2) actual overhead. Support your discussion with calculations. Determine whether overhead would be under- or overapplied and by how much.
Homework Answers
a) Predetermined overhead rate = Estimated overhead / Estimated painting hours = 780,000 / 39,000 = $20 per hour
b) Overheads applied = $20 * 38,750 = 775,000
| General Journal | Debit | Credit |
| Work in Process | 775,000 | |
| Manufacturing overhead | 775,000 |
c) The overhead is overapplied by $2550 ( 775,000 - 772,450)
d) Predetermined overhead rate = Estimated overhead / Estimated painting hours = 799,500 / 39,000 = $20.5 per hour
Applied overheads = $20.5 * 38750 = 794,375
Overhead overapplied = 794,375 - 772,450 = 21925
Pristine Painting Services uses a job order cost system to collect the costs of its home...
Pristine Painting Services uses a job order cost system to collect the costs of its home painting business. Each customer’s house is treated as a separate job. Overhead is applied to each job based on the number of painting hours required for each house. Listed below are the data for the current year: Estimated overhead $689,400 Actual overhead $710,290 Estimated painting hours 38,300 Actual painting hours 39,600 Prepare the entry to apply the overhead for the year. (Credit account titles...
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Exercise 15-13
Tombert Decorating uses a job order cost system to collect the
costs of its interior decorating business. Each client’s
consultation is treated as a separate job. Overhead is applied to
each job based on the number of decorator hours incurred. Listed
below are data for the current year.
Estimated overhead
$1,000,000
Actual overhead
$1,014,800
Estimated decorator hours
40,000
Actual decorator hours
40,200
The company uses Operating Overhead in place of Manufacturing
Overhead.
Compute the predetermined overhead rate.
Predetermined...
Question 4 Easy Decorating uses a job-order costing system to collect the costs of its interior...
Question 4 Easy Decorating uses a job-order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. List below are data for the current year: Estimated overhead $840,000 Actual overhead $861,000 Estimated decorator hours 40,000 Actual decorator hours 41,500 Instructions (a) Compute the predetermined overhead rate: $______ per decorator hour. (b) Determine whether the overhead was...
Tombert Decorating uses a job order cost system to collect the costs of its interior decorating...
Tombert Decorating uses a job order cost system to collect the
costs of its interior decorating business. Each client’s
consultation is treated as a separate job. Overhead is applied to
each job based on the number of decorator hours incurred. Listed
below are data for the current year.
Estimated overhead
$990,000
Actual overhead
$1,073,800
Estimated decorator hours
40,000
Actual decorator hours
40,200
The company uses Operating Overhead in place of Manufacturing
Overhead.
Prepare the entry to apply the overhead for...
Exercise 15-13 Tombert Decorating uses a job order cost system to collect the costs of its...
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Exercise 15-13 Tombert Decorating uses a job order cost system to collect the costs of its...
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Exercise 15-13
Tombert Decorating uses a job order cost system to collect the
costs of its interior decorating business. Each client’s
consultation is treated as a separate job. Overhead is applied to
each job based on the number of decorator hours incurred. Listed
below are data for the current year.
Estimated overhead
$1,000,000
Actual overhead
$1,014,800
Estimated decorator hours
40,000
Actual decorator hours
40,200
The company uses Operating Overhead in place of Manufacturing
Overhead.
Compute the predetermined overhead rate.
Predetermined...
Tombert Decorating uses a job order cost system to collect the
costs of its interior decorating business. Each client’s
consultation is treated as a separate job. Overhead is applied to
each job based on the number of decorator hours incurred. Listed
below are data for the current year.
Estimated overhead
$990,000
Actual overhead
$1,073,800
Estimated decorator hours
40,000
Actual decorator hours
40,200
The company uses Operating Overhead in place of Manufacturing
Overhead.
Prepare the entry to apply the overhead for...
Exercise 15-13 Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Estimated overhead Actual overhead Estimated decorator hours Actual decorator hours $1,050,000 $1,039,800 40,000 39,500 The company uses Operating Overhead in place of Manufacturing Overhead and it uses Service Contracts in...
Exercise 15-13 Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate fob. Overhead is a current year. Estimated overhead Actual overhead Estimated decorator hours Actual decorator hours $1,000,000 $1,058,800 40,000 41,500 The company uses Operating Overhead in place of Manufacturing Overhead. Compute the predetermined overhead rate. Predetermined overhead rate per decorator hour or decorating business. Each client's consultation is treated as a separate Job...
Exercise 15-13 Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Estimated overhead Actual overhead Estimated decorator hours Actual decorator hours $960,000 $995,800 40,000 40,700 The company uses Operating Overhead in place of Manufacturing Overhead. x your answer is incorrect. Try...
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