Problem 31 - Peters, Inc. manufacturesHOMEWORK  machines. It uses a normal costing system. Any amount of over or underapplied overhead is immaterial. Actual manufacturing overhead for the year is $55,500. Overhead is applied based on direct labor cost. During June, Peter’s transactions and accounts included the following:        Finished goods inventory, ending $11,60

0Sales $324,000

Finished goods inventory, beginning 12,300 Direct labor cost 72,400Indirect materials issued to production

3,200 Direct materials purchased 178,000

General administrative expenses 9,400 Work in process inventory, ending 12,800Raw materials inventory, ending 4,500 Work in process inventory,

beginning10,500

Raw materials inventory, beginning 5,100 Total manufacturing overhead applied

56,100

 A.  How much is cost of goods manufactured?

Beginning raw materials inventory $5,100Raw materials purchased 178,000= Materials available for use $183,100Less indirect materials used (3,200)Less ending raw materials inventory   (4,500) = Materials used in production $175,400Direct labor used   72,400Manufacturing overhead costs applied     56,100  Total manufacturing costs  $303,900 Add beginning work in process 10,500 Less ending work in process (12,800) Cost of goods manufactured $301,600

 B.  Calculate the cost of goods sold after adjustment for over/underapplied overhead.

Beginning finished goods $12,300Cost of goods manufactured 301,600Less ending finished goods inventory (11.600)= Cost of goods sold $302,300Overapplied overhead ($55,500-$56,100)         (600) Adjusted cost of goods sold $301,700

 C.   How much is total inventory on the June 30th balance sheet?  

Raw materials $11,600Work in process 12,800Finished goods       4,500 = Total inventory at 6-30-03 $28,900

 

Problem 32 - The manufacturing operations of Honcho, Inc. had the following balances for the month of March:

Inventories 3/1/03 3/31/03Raw Materials $10,000 $12,000

Work in process  6,000  7,000Finished goods 30,000 22,000

If Honcho transferred $38,000 of completed goods out of work in process during March, what was the amount of the cost of goods sold?Amounts transferred out of work in process are moved into finished goods as 'cost of goods manufactured'. Beginning finished goods plus cost of goods manufactured less ending finished goods = cost of goods sold    $30,000 + $38,000 - $22,000 = $46,000 

Problem 33 - Under Company estimates the following overhead costs for 2003:Equipment depreciation $  30,000Equipment maintenance 64,000Factory management salaries 150,000Factory rent     50,000    Total manufacturing overhead $294,000

   Under Company incurred the following costs for 2003 for job 23:Direct material $80,000Direct labor 60,000

 Other jobs incurred $320,000 of direct labor. Under Company is also budgeting $350,000 in direct labor costs and 20,000 machine hours for 2003. Actual manufacturing overhead for 2003 was $300,000. A. Calculate the predetermined overhead rate using direct labor costs as the allocation base.     $294,000/$350,000 = $ 0.84 per direct labor dollar B.  Which of the allocation bases is preferred?  Why?Since most of the overhead costs are related to equipment, machine hours is the preferred allocation base. C. How much overhead will Under apply to job 23?     $0.84 x $60,000 = $50,400 D.  What is the total cost of job 23?$50,400 + $80,000 + $60,000 = $190.400 

Problem 34 - Stranahan Company allocates overhead based on machine hours. Estimated overhead costs for the year total $217,000 and the company estimates that it will use 31,000 machine hours during the year. Actual overhead for the year was $220,000 and the company used 30,000 machine hours. If Job 45 requires 1,000 machine hours, how much overhead will be allocated to Job 45?           $217,000/31,000 machine hours = $7.00 per machine hour            $7.00 per machine hour * 1,000 machine hours = $7,000

 

Problem 35 - Fane Company estimates that its employees will work 80,000 direct labor hours during the coming year. Total overhead costs for the year are estimated to be $1,000,000 and the direct labor costs are expected to be $1,300,000. Actual overhead for the year was $980,000 and the company used 82,000 direct labor hours. If the company allocates overhead based on direct labor hours, what is the predetermined overhead rate?    $1,000,000/80,000 = $12.50 per direct labor hour 

Problem 36 -Hernandez, Inc. manufactures calculators. The company uses a normal costing system. The company allocates overhead at $25 per direct labor hour. Over or underapplied overhead is not material. During May, Hernandez’s transactions included the following:          

Direct labor cost incurred @ $20 an hour $5,400Manufacturing overhead cost incurred 6,800Direct materials purchased 11,500Indirect materials issued to production 1,100Manufacturing overhead cost applied 6,650Raw materials inventory, beginning 160Raw materials inventory, ending 280Sales 23,000Selling expenses 2,100Work in process inventory, beginning 220Work in process inventory, ending 250

 A.  Briefly list any additional information you need to calculate cost of goods sold for this company. (Be specific.)Beginning finished goods inventory and ending finished goods inventory (You have enough information to calculate cost of goods manufactured so you don't need that amount.) B.  How much is the cost of direct materials issued to production during May?

Raw materials inventory, beginning $    160Direct materials purchased 11,500Indirect materials issued (1,100)Less Raw materials inventory, ending           (280) Cost of direct materials issued to production $10,280

C.  How much overhead would be applied during May?      Direct labor cost/Cost per hour = number of direct labor hours incurred       $5,400/$20 = 270 hours        Applied = 270 hours x $25 = $6,750      D. How much is over or underapplied overhead for May?        $6,750 - $6,800 = $50 underapplied 

Problem 37 - At the end of the year, Deary Company had the following balances in selected accounts related to its job cost system:

Raw Materials Inventory $  40,000 Work in Process Inventory $100,000Finished Goods   60,000 Cost of Goods Sold 800,000

 Information concerning manufacturing overhead and labor for the year follows: 

Actual manufacturing overhead $290,000 Direct labor hours incurred

15,600

Estimated manufacturing overhead

$300,000 Direct labor hours estimated

15,000

Actual direct labor cost per hour $17 MOH applied based on Direct labor hours

 A.   Calculate the predetermined manufacturing overhead rate.  

Estimated MOH/ Est. DL hours =  $300,000/15,000 = $20 per DL hour

Note: This is the number we use to apply MOH to jobs as we are working on them….in this case, for each direct labor hour our people work, we add $20 for MOH costs. B.      How much overhead did Deary apply to jobs during the year?Must be applied based on the estimated cost per DL hour calculated in part A since we don’t know how much the actual cost will be until the end of the period.

$20 x 15,600 hours = $312,000 C.  How much is CGS after Deary properly allocates any ‘under or over-applied manufacturing overhead’?

Step 1: Determine how much is over or underapplied:  Actual amount in the MOH expense account  Applied (from part B)   (this is how much we took out of the MOH expense account)Overapplied (a negative balance left in the MOH expense account)  [NOTE: This amount cannot stay there…we must take it out and move it all to CGS.

CGS = $800,000 - $22,000 = $778,000 

Problem 38 - Saman, Inc. manufactures coasters and allocates overhead based on direct labor cost. Saman uses a normal cost system. During August, Saman’s accounts included the following balances and transactions:      

Work in process, beginning $25,200Work in process, ending 27,600Finished goods beginning 7,300Finished goods, ending 6,800Administrative expenses 12,000Direct labor cost incurred 20,400Materials purchased 78,000Raw materials, beginning  3,300Direct materials used 76,400Manufacturing overhead cost applied 20,100

Indirect materials issued to production 2,200Sales 167,000Marketing expenses 11,000Manufacturing overhead cost incurred 21,,000

 A.  How much is ending raw materials at August 31 Beginning inventory  $    3,300 + Material purchases    78,000  - Indirect materials issued   (2,200)  - Direct materials used     (76,400)  = Ending raw materials $2,700  B.  How much is cost of goods manufactured?Direct materials $76,400Direct labor 20,400Manufacturing overhead 20,100    Total manufacturing costs 116,900Add beginning WIP 25,200Less ending WIP (27,600)Cost of goods manufactured $114,500 C.    How much is cost of goods sold? (Be sure to consider the under or overapplied overhead.)Beginning FG inventory $7,300Add CGM (part B) 114,500Less ending FG inventory (6,800)= Cost of goods sold $115,000Underappplied($21,000-$20,100) 900Adjusted cost of goods sold $115.900 

Problem 39 - Hager Inc. applies overhead based on direct labor cost using a normal cost system. The company estimated the following annual amounts:

Estimated manufacturing overhead $42,000Estimated direct labor 1,600 hours at $15 per hour

Actual amounts for the year were:Actual manufacturing overhead $44,000Actual direct labor 1,550 hours at $16 per hour

 A.    How much is the predetermined overhead rate?Estimated manufacturing overhead/Estimated direct labor cost =$42,000/(1,600*$15) = $1.75 per direct labor dollar B.    How much overhead was applied during the year?Overhead rate x DL$ incurred =$1.75 x [1,550*$16] = $43,400

 C.   Determine the amount of over or underapplied overhead.Applied - Actual = $43,400 - $44,000 = $600 underapplied 

Problem 40 -  Jiffy Fabricators applies overhead based on direct labor cost. The company provided the following annual amounts:

Estimated direct labor 2,000 hours at $12.50 per hourActual direct labor 1,900 hours at $13 per hourEstimated manufacturing overhead $30,000Actual manufacturing overhead $31,000

 A.  How much overhead was applied during the year? $29,640    Overhead application rate = Estimated MOH cost/Estimated DL$        = $30,000/[2,000*$12.50] = $1.20 per DL$    Overhead applied = $1.20 x [1,900*$13] = $29,640 B. Determine the amount of over or underapplied overhead. $1,360 Under applied   Applied MOH − Actual MOH = $29,640 − $31,000 = $1,360 underapplied     Remember me saying that some of you would forget that 'estimated MOH' does not appear anywhere in the accounting records?                                                                                                             

Problem 41 -  Deegan, Inc. manufactures bliggles and allocates overhead based on direct labor cost. During June, Deegan’s accounts included the following balances and transactions:     

Raw materials inventory, beginning $  700 Direct materials purchasedRaw materials inventory, ending 850 Direct labor cost incurredManufacturing overhead cost applied 9,500 Indirect materials issued to productionMarketing expenses 11,000 Work in process inventory, beginningManufacturing overhead cost incurred 9,000 Work in process inventory, endingSales 98,000 Administrative expenses

Under and overapplied overhead are considered immaterial. A. How much is the cost of direct materials issued to production during June? $40,850 

Raw materials inventory, beginning $    700Direct materials purchased 45,000Goods available 45,700Less raw materials inventory, ending       (850)Less indirect materials to production (4,000)Cost of direct materials issued to production $40,850

 B.  How much is cost of goods manufactured? $67,950 

Direct materials used in production (from part A) $40,850Direct labor cost incurred 16,400

Manufacturing overhead cost applied     9,500    Total manufacturing costs 66,750Add: Work in process inventory, beginning 7,800Less: Work in process inventory, ending   (6,600) Cost of Goods Manufactured $67,950

 Note: Indirect materials issued to production are considered manufacturing overhead costs and as such, are already included in actual manufacturing overhead. 

Problem 42 -  The accounting records of Cinotti Manufacturing Company include the following information:

Dec. 31, 2004 Dec. 31, 2003

Work in process inventory $  15,000 $  12,000Finished goods inventory      45,000     51,000Materials purchased    331,000Raw materials inventory ?    24,000Direct materials used    325,000Manufacturing overhead incurred    124,000Direct labor    120,000Selling expenses      70,000

Manufacturing overhead is applied at a rate of 110% of direct labor cost. Calculate the following: 1.    Raw materials inventory at 12-31-04  

Beginning raw materials inventory $  24,000Raw materials purchased 331,000= Materials available for use $355,000Less materials used in production   (325,000) Less ending raw materials inventory $30,000

 2.    Total manufacturing costs added to Work in Process Inventory during 2004  

Materials used in production $325,000Direct labor used   120,000Manufacturing overhead costs applied (110%*$120,000   132,000 Total manufacturing costs added to WIP  $577,000

 3.    Cost of goods manufactured during 2004  

 Total manufacturing costs added (From part 2)  $577,000 Add beginning work in process 12,000 Less ending work in process (15,000) Cost of goods manufactured $574,000

 4.      Total inventories on Cinotti’s December 31, 2004 balance sheet  

Raw materials (from part 1) $30,000Work in process 15,000

Finished goods       45,000 Total inventory $90,000

  5.    Assume CGM is $500,000. How much is cost of goods sold for 2004?   

Beginning finished goods $51,000Cost of goods manufactured 500,000Less ending finished goods inventory (45,000)Cost of goods sold $506,000

 

Problem 43 - Earl, Inc. manufactures baseballs and allocates overhead based on direct labor cost. During June, Earl’s accounts included the following balances and transactions:   

Manufacturing overhead cost applied $33,300

Raw materials, beginning $ 11,500

Indirect materials issued to production 1,400 Finished goods beginning 8,400Administrative expenses 24,000 Finished goods, ending 9,600Direct labor cost incurred 32,000 Work in process, beginning 21,500Cost of materials purchased 140,00

0Work in process, ending 18,900

Direct materials used in production 143,000

Marketing expenses 27,000

Manufacturing overhead cost incurred 35,000 Sales 285,000

Under and overapplied overhead are considered immaterial. Ignore over/ underapplied elimination in parts B and C.   A.  How much is ending raw materials at June 30

Raw materials inventory, beginningDirect materials purchasedGoods availableLess cost of direct materials issued to productionLess indirect materials to productionRaw materials inventory, ending

 B. How much is cost of goods manufactured for June?

Direct materials used in productionDirect labor cost incurredManufacturing overhead cost applied   Total manufacturing costsAdd: Work in process inventory, beginningLess: Work in process inventory, endingCost of Goods Manufactured

 C. How much is cost of good sold?

Beginning finished goodsCost of goods manufactured (part B)

Less ending finished goods inventoryCost of goods sold

 D. Is this company using an actual or normal costing system?    Normal costing 

Problem 44 - Walker Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for May of 2005 as follows: 

Actual manufacturing overhead $163,800Estimated manufacturing overhead $158,600Direct labor incurred 2,500 hours @ $22 = $55,000Direct labor estimated 2,600 hours @ $21 = $54,600

 A.  How much is the manufacturing overhead rate?Estimated manufacturing overhead/estimated direct labor hours =$158,600 / 2,600 hours = $61.00 per DL hour B.  How much overhead did Walker apply during the year?Overhead rate times actual DL hours =$61 x 2,500 = $152,500  C.  How much is over or underapplied overhead at May 31?Actual overhead - applied overhead =$163,800 - $152,500 = $11,300 underapplied 

Problem 45 - Harmon Company began jobs 35, 36, 37, and 38 during July. At the beginning of July, jobs 31, 33, and 34 were in production, while jobs 30 and 32 were completed and waiting to be shipped to customers. Jobs 31, 33, 34, 36, and 37 were completed during July. Jobs 30, 31, 32, 34, and 36 were shipped to customers during July.Which jobs were completed and transferred out during July? 31, 33, 34, 36, 37Which jobs are in work in process at July 31? 35 and 38Which jobs are in finished goods at July 31? 33 and 37Calculations:WIP beginning = 31, 33, 34Jobs added = 35, 36, 37, 38Jobs worked on = 31, 33, 34, 35, 36, 37, 38Less jobs completed and transferred out = 31, 33, 34, 36, 37Ending jobs remaining in WIP = 35 and 38Ending jobs remaining in FG = 33 and 37 

Problem 46 - The underapplied balance of the Manufacturing Overhead account is $30,000. The amount is considered material. The ending balances of Raw materials,

Work in Process, Finished Goods, and Cost of Goods Sold are $10,000, $25,000, $50,000, and $425,000, respectively. What amount of the underapplied balance should be allocated to Cost of Goods Sold?Since the amount is considered material, the underapplied amount must be allocated to the three accounts with overhead in them: Work in Process, Finished Goods, and Cost of Goods Sold, based on their balances:Work in Process $25,000Finished Goods 50,000Cost of Goods Sold 425,000Total $500,000 Allocated to CGS: $425,000/$500,000 x $30,000 = $25,500 

Problem 47 - Hoart Company applies overhead based on direct labor hours and calculated an overhead rate of $2.  Job 55 used $500 of direct materials, 100 machine hours, $750 of direct labor. The labor rate per hour is $15. How much is the cost of job 55?Number of hours = $750/$15 = 50 DL hoursDM + DL + MOH = $500 + $750 + 50*$2 = $1,350 Problem 24 Gottberg Company bases its predetermined overhead rates on machine-hours. At the beginning of the year, the company estimated its manufacturing overhead for the year would be $56,000 and there would be a total of 40,000 machine-hours. Actual manufacturing overhead for year amounted to $58,000 and the actual machine-hours totaled 44,800. How much manufacturing overhead was applied for the year?Applied at the rate of: $56,000/40,000 = $1.40 per machine hour;$1.40 x 44,800 MH = $62,720; Actual amounts cannot be used to determine the rate because they are not known until the end of the year. 

Problem 48 - Moss Company applies manufacturing overhead based on direct labor hours. It provided the following information from its accounting records for 2003:           

Expected production

30,000 labor hours

Actual production 28,000 labor hoursBudgeted overhead $1,500,000Actual overhead $1,450,000

        Jobs 102 & 103 are completed during the period.A.  What is the overhead application rate?$1,500,000/30,000 = $50 per hour B. How much overhead will be applied to job 103 if its total labor cost was $4,320 and labor is $18 per hour?

Number of labor hours = $4,320/$18 = 240 hoursOverhead applied = 240 hours*$50 = $12,000 

Problem 49- Sat Company’s factory overhead account showed a $8,000 underapplied overhead balance on December 31. Other accounts showed the following balances at year end:

Raw materials $100,000Work in Process 40,000Finished Goods 60,000Cost of Goods Sold

700,000

Which will be the balances of each account listed below after disposing the $8,000?Cost of Goods Sold$700,000 + $8,000 = $708,000 Work in Process$40,000 no change Finished Goods$60,000 no change Work in Process$40,000 no change Underapplied overhead is moved to cost of goods sold since most of the overhead cost would likely be in that account by year end. 

Problem 50 - Benny Company allocates overhead at $4 per direct labor dollar. Job 52 required 6 cases of direct materials at a cost of $6 per case and took employees of 5 hours to complete. Employees earn $10 per hour. How much is the total cost of Job 52?DM = 6 x $6 = $36DL = $10 x 5 hrs. = $50MOH = $4 x $50 = $200Total cost = $286 

Problem 51 - Clinton's Furniture Company estimates its annual factory overhead to be $47,000. The company assigns factory overhead using the number of pieces produced. Clinton budgets annual production at 70,000 pieces of glassware. At year-end, you find out Clinton incurred $52,000 of factory overhead for the year. Suppose the company produced 75,000 pieces in 2002.A.  What is the total amount of factory overhead applied to production for the year?($47,000/70,000) x 75,000 = $50,357 

B. How much is factory overhead under- or over-applied?Answer:   $50,357 - $52,000 = $1,643 underapplied 

Problem 52 - Actual manufacturing overhead costs $120,000; estimated manufacturing overhead costs $100,000; actual machine hours 25,000; and estimated machine hours 20,000. The only cost driver is machine hours.A. Using job order costing, how much is the 2002 predetermined overhead application rate?$100,000/20,000 = $5.00 per hourB.  How much is the amount of manufacturing overhead allocated to jobs during 2003?$100,000/20,000 = $5.00/machine hour; $5.00 x 25,000 = $125,000 

Problem 53 - Dougan, Inc. allocates overhead based on a predetermined overhead rate of $16.00 per direct labor hour. Employees are paid $12.00 per hour. Job 24 requires 4 pounds of direct material at a cost of $30.00 per pound. It is estimated it will take employees a total of 20 hours to complete the job. Actual manufacturing overhead costs totaled $80,000 for the year for the company. How much is the cost of Job 24?Direct materials (4 x $30) $120Direct labor ($12 x 20) 240Manufacturing overhead ($16 x 20) 320Total job cost $680 

Problem 54 - Duckworth Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $100,000 and direct labor hours would be 10,000. The actual figures for the year were $110,000 for manufacturing overhead and 10,500 direct labor hours. How much is over or underapplied overhead for the year? Actual manufacturing overhead $110,000Applied overhead:    Rate x DL hours incurred =    [$100,000/10,000] x 10,500 = 105,000Underapplied overhead $5,000 

Problem 55 - Carr Company has the following estimated costs for next year:Direct materials $  30,000 Salary of production supervisor $70,000Direct labor 110,000 Indirect materials 10,000Factory operating costs 144,000 Advertising expense 32,000

Carr applies manufacturing overhead on the basis of machine hours. Carr estimates that 20,000 direct labor and 32,000 machine hours will be worked during the year. Actual direct labor and machine hours for the year were 19,600 and 33,000, respectively. Actual overhead was $226,000 for the year. How much overhead is over or underapplied at year end? 

Overhead rate = Estimated Overhead/Estimated Activity= [$144,000 + $70,000 + $10,000]/32,000 = $7.00 per machine hourApplied = $7.00 x 33,000 machine hours = $231,000Overapplied overhead = Actual overhead - applied overhead = $226,000 - $231,000 = $5,000                                             

Problem 56 - Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: 

Actual manufacturing overhead $150,000 Direct labor hours incurred 4,800Estimated manufacturing overhead

$140,000 Direct labor hours estimated 5,000

How should the manufacturing overhead allocation rate be calculated?      $140,000 � 5,000 = $28 

Problem 57 - The following amounts were reported by Winkler Company before adjusting its overapplied manufacturing overhead of $20,000.

Raw Materials Inventory $40,000    Work in Process Inventory

$100,000

Finished Goods   60,000    Cost of Goods Sold 840,000How much will Winkler report as cost of goods sold after it disposes of its overapplied overhead?Since overhead is overapplied, too much was added to the product accounts. To remove overapplied, you must subtract. Since the amount is immaterial, the entire amount is removed from cost of goods sold: $840,000 - $20,000 = $820,000. 

Problem 58 - On Monday, Janu Flowers purchases roses costing $8,000. On Tuesday, Janu uses $5,000 of the flowers to begin preparing for Friday evening's Lovers Dance. On Wednesday, Janu paid $1,500 of labor for its employees for working on the job. Overhead is applied at 80% of direct labor cost. What is the ending account balance of Finished Goods after these transactions when the job is complete?Materials = $5,000 + Labor $1,500 + Mfg. overhead ($1,500*80%) $1,200 = $7,700 

Problem 59 - During 2003 Lawson Manufacturing expected to produce 100,000 units with $300,000 of overhead, $500,000 of material, and $200,000 in labor. Actual production was 110,000 units with an overhead cost of $280,000, $550,000 in materials used; and $220,000 in labor. All of the goods were completed and transferred to Finished Goods. A.  What amount was transferred to Finished Goods?Overhead is applied based on the estimates of overhead and activity:    $300,000/100,000 = $3 per unit produced;As activity occurs (i.e., units are produced) the company applies overhead. In this case, the company adds $3 to WIP each time one unit is produced. Total applied:

110,000 units x $3 = $330,000 applied. Total cost transferred: DM + DL + OH applied = $550,000 + $220,000 + $330,000 = $1,100,000 B.  How much is the amount of over/under applied overhead?      Applied = $330,000 less actual $280,000 = $50,000 overapplied 

Problem 60 - Hernandez, Inc. pays its employees $12 per hour. It allocates overhead at $3 per direct labor hour. Job R45 required 5 pounds of direct materials at a cost of $5 per pound and took employees of 2 hours to complete. How much is the total cost of Job R45?DM + DL + MOH = total cost[5 x $5] + [2 x $12] + [2 x $3] = $55 

Problem 61 - Builder Bob Company allocates overhead at $9 per direct labor hour. Job A45 required 5 boxes of direct materials at a cost of $30 per box and took employees 12 hours to complete. Employees earn $15 per hour. How much is the total cost of Job A45?DM + DL + MOH = (5 x $30) + ($15 x 12) + ($9 x 12) = $438 

Problem 62 -  Holl Company incurred direct materials costs of $30,000 during the year. Manufacturing overhead applied was $28,000 and is applied based on direct labor costs. The predetermined overhead rate is 70%. How much are Holl Company’s total manufacturing costs for the year?$28,000 = .70(DL); so DL = $40,000;DM + DL + MOH = total manufacturing costs for the year$30,000 + $40,000 + $28,000 = $98,000 

Problem 63 - Bell Manufacturing assigns overhead based on direct labor dollars. The company incurred the following for Job B22: $2,500 for direct materials and 20 hours of direct labor. Employees are paid $11 per hour. The following estimates were made by the company at the beginning of the year for 2004 operations:

Expected annual direct labor hours 10,000Expected annual direct labor cost $250,000Expected manufacturing overhead costs $300,000

How much is overhead applied to job B22?  Rate = $300,000/$250,000 = $1.20 per DL dollar;Overhead applied at $1.20 for each dollar of labor incurred on the job: $1.20 x [$11 x 20] = $264 

Problem 64 - Zing Manufacturing assigns overhead based on direct labor dollars. The company incurred the following for job A24: $200 for direct materials and 30 hours of direct labor. Employees are paid $12 per hour. The predetermined overhead rate was

calculated at $1.10 based on direct labor dollars. Estimated manufacturing overhead for the year was $38,000. The company expected to complete 100 jobs during the year. How much is the total cost of job A24?

Direct materials $200Direct labor [30 hours x $12] 360MOH [$1.10 x $360 of labor] 396Total job cost $956

 

Problem 65 - McCargo Repair has the job 26 ($4,000) in beginning work in process, and job 25 ($3,000) in beginning finished goods. Additional job costs incurred during the year were: Job 27 $5,000, Job 28 $4,500, and Job 29 $5,500. Jobs 26, 27 and 29 are completed. Jobs 25, 26 and 29 are sold. What is the cost of ending finished goods?Only job 27; Cost = $5,000Jobs 26, 27, and 29 were transferred from WIP into FG to join job 25 during the year. Jobs (25, 26, and 29) were moved out to CGS when sold. This leaves only job 27 in FG. 

Problem 66 - McLeod Company’s factory overhead account showed a $4,000 overapplied balance on December 31. Other accounts showed the following balances at year end:

Raw materials $25,000Work in Process 20,000Finished Goods 30,000Cost of Goods Sold

450,000

Determine the balances of the accounts listed below after disposing the $4,000. A.   Cost of Goods Sold = $450,000 - $4,000 = $446,000B.   Work in Process = $20,000 -C.   Finished Goods = $30,000D.   Raw Materials =  $25,000 

Problem 67 - Timber Company uses a predetermined overhead rate of $7.00 per machine hour. If estimated overhead costs were $350,000, overhead costs incurred were $360,000, estimated machine hours were 50,000, and machine hours worked were 51,000 this year, how much is applied overhead?Overhead is applied based on the actual activity. The activity for the $7 rate is 'machine hour.' Every time one machine hour is incurred, $7 is added as MOH to WIP. The rate was calculated by taking total estimated MOH costs divided by estimated machine hours:    $350,000/50,000 = $7. Applied = $7 x 51,000 = $357,000 

Problem 68 -  Fibbe Company estimated it would incur $65,000 of manufacturing overhead during 2004. An analysis indicates that overhead applied totaled $68,000. The actual manufacturing overhead cost during the year was $66,000. How much is over or under applied overhead?Actual manufacturing overhead costs increase the MOH expense account. Applied MOH costs decrease it. The difference is over or under applied. Note that the estimated MOH amount does not get recorded into the accounting records.Actual MOH costs ($66,000)Applied MOH   68,000 Overapplied overhead $2,000