Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 17, Problem 14SE
1.
To determine
Compute the predetermined overhead allocation rate of R Accountants.
2.
To determine
Compute the indirect cost that will be allocated to Client 507 if Person JS, an accountant at R Accountants, works 15 hours to prepare the financial statements.
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Hello,
Please provide the steps to solve the problem below:
At the beginning of the year, a company estimates total overhead costs of $300,000. The company applies overhead using direct labor costs and estimates it will spend $1,200,000 on direct labor during the year. What amount of overhead should be applied to "Job C" if that job uses $65,000 of direct labor hours during April?
WUIKS UH three jobs during the upcoming year.
Direct labor-hours recorded by job are: job 237, 7,000 hours; job 250.
30,000 hours; and job 239, 21.000 hours. How much overhead cost will
the company apply to Work in Process for the year? If actual costs are
P420,000 for the year, will overhead be underapplied or overapplied? by
how much?
Exercise 4 (Departmental Overhead Rates)
Bobcat Company has two departments, milling and assembly. The company
uses a job-order cost system and computes a predetermined overhead rate in
each department. The milling department bases its rate on machine-hours, and
the assembly department bases its rate on direct labor cost. At the beginning
of the year, the company made the following estimates:
Department
Milling
8,000
60,000
P510,000
72,000
Assembly
Direct labor-hours
75,000
3,000
P800,000
640,000
Machine-hours
Manufacturing overhead cost
Direct labor cost
Required:
1. Compute the predetermined overhead rate to be used in each department.
2. Assume that…
Chance Consulting, a consulting firm, specializes in advising companies on creating business plans. Chance Consulting uses a job cost system with a predetermined indirect cost allocation rate computed as a percentage of expected direct labor costs.
At the beginning of the year, managing partner Sarah Chance prepared the following plan, or budget, for the year:
Direct labor hours (professionals)
19,000 hours
Direct labor costs (professionals)
$2,650,000
Office rent
$260,000
Support Staff Salaries
$870,000
Utilities
$340,000
Juda Resources is inviting several consulting firms to bid for work. Chance estimates that this job will require about 220 direct labor hours.
Compute Chance Consulting’s hourly direct labor cost rate and their indirect cost allocation rate
What is the estimate cost for the Juda Resources Consulting Contract?
If Chance Consulting wants to earn a profit that equals 35% of the job’s cost, how much should the company bid…
Chapter 17 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Would the following companies most likely use a...Ch. 17 - Prob. 6TICh. 17 - Record the following journal entries for Smith...Ch. 17 - Prob. 8TICh. 17 - Prob. 9TICh. 17 - Prob. 10TI
Ch. 17 - Prob. 11TICh. 17 - Prob. 12TICh. 17 - The following information pertains to Smith...Ch. 17 - Prob. 14TICh. 17 - Prob. 15TICh. 17 - Prob. 16TICh. 17 - Wesson Company is a consulting firm. The firm...Ch. 17 - Prob. 18TICh. 17 - Would an advertising agency use job order or...Ch. 17 - Prob. 2QCCh. 17 - When a manufacturing company uses indirect...Ch. 17 - When a manufacturing company uses direct labor, it...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - Gell Corporation manufactures computers. Assume...Ch. 17 - A manufacturing company completed work on a job....Ch. 17 - For which of the following reasons would David...Ch. 17 - Why do managers need to know the cost of their...Ch. 17 - What types of companies use job order costing...Ch. 17 - What types of companies use process costing...Ch. 17 - What is the purpose of a job cost record?Ch. 17 - Explain the difference between cost of goods...Ch. 17 - A job was started on May 15, completed on June 27,...Ch. 17 - Give the journal entry for raw materials purchased...Ch. 17 - What is the purpose of the raw materials...Ch. 17 - How does the use of direct and indirect materials...Ch. 17 - Prob. 10RQCh. 17 - Give five examples of manufacturing overhead...Ch. 17 - What is the predetermined overhead allocation...Ch. 17 - What is an allocation base? Give some examples.Ch. 17 - How is manufacturing overhead allocated to jobs?Ch. 17 - A completed job cost record shows the unit cost of...Ch. 17 - Prob. 16RQCh. 17 - Give the journal entry for the completion of a...Ch. 17 - Prob. 18RQCh. 17 - Explain the difference between underallocated...Ch. 17 - If a company incurred 5,250 in actual overhead...Ch. 17 - Prob. 21RQCh. 17 - Explain the terms accumulate, assign, allocate,...Ch. 17 - Prob. 23RQCh. 17 - Prob. 24RQCh. 17 - Would the following companies most likely use job...Ch. 17 - Prob. 2SECh. 17 - Analyze the following T-accounts to determine the...Ch. 17 - Prob. 4SECh. 17 - Oak Outdoor Furniture manufactures wood patio...Ch. 17 - Job 303 includes direct materials costs of 550 and...Ch. 17 - Calculating predetermined overhead allocation...Ch. 17 - Lincoln Company completed jobs that cost 38,000 to...Ch. 17 - Columbus Enterprises reports the following...Ch. 17 - The T-account showing the manufacturing overhead...Ch. 17 - Adjusting Manufacturing Overhead Justice Companys...Ch. 17 - Prob. 12SECh. 17 - Prob. 13SECh. 17 - Prob. 14SECh. 17 - Prob. 15ECh. 17 - Defining terminology Match the following terms to...Ch. 17 - Prob. 17ECh. 17 - Goldenrod Company makes artificial flowers and...Ch. 17 - Selected cost data for Classic Print Co. are as...Ch. 17 - Prob. 20ECh. 17 - Prob. 21ECh. 17 - Prob. 22ECh. 17 - Jordan Company has the following information for...Ch. 17 - Journalize the following transactions for Marges...Ch. 17 - Prob. 25ECh. 17 - Analyze the following T-accounts, and determine...Ch. 17 - Prob. 27ECh. 17 - Clement Manufacturing makes carrying cases for...Ch. 17 - Ki Technology Co. manufactures DVDs for computer...Ch. 17 - Superior Construction, Inc. is a home builder in...Ch. 17 - Accounting for manufacturing overhead Prestige...Ch. 17 - Mighty Stars produces stars for elementary...Ch. 17 - Bluebird Design, Inc. is a Web site design and...Ch. 17 - Sutherland Manufacturing makes carrying cases for...Ch. 17 - Ye Technology Co. manufactures DVDs for computer...Ch. 17 - Meadow Construction, Inc. is a home builder in...Ch. 17 - Accounting for manufacturing overhead Elegant...Ch. 17 - Hero Stars produces stars for elementary teachers...Ch. 17 - Skylark Design, Inc. is a Web site design and...Ch. 17 - Accounting for manufacturing overhead This problem...Ch. 17 - Granite Construction Incorporated is a major...Ch. 17 - Hiebert Chocolate, Ltd. is located in Memphis. The...Ch. 17 - Prob. 1FC
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- Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: It estimates there will be five orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardPlease use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardIf a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?arrow_forward
- When setting its predetermined overhead application race, Tasty Box Meals estimated its overhead would be $100,000 and would require 25,000 machine hours in the next year. At the end of the year. It found that actual overhead was $102,000 and required 26,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under applied or over applied overhead.arrow_forwardYork Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?arrow_forwardThe cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?arrow_forward
- Compute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.arrow_forwardNeptune Accounting Services expects its accountants to work for 26,000 direct labor hours per year. The company's estimated total indirect costs are $227,000. The direct labor rate is $65 per hour. The company uses direct labor hours as the allocation base for indirect costs. If Neptune performs a job requiring 40 hours of direct labor, what is the total job cost? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A. $2,949 B. $227,000 C. $2,600 D. $349arrow_forwardA&R Quality Advisors is a small consulting firm offering quality audits and advising services to small and mid-sized manufacturing firms. Quality audits entail reviewing, checking, and documenting quality practices within a firm. Quality advising entails making recommendations for new or revised quality practices. Other firms in the area offer one or both of these services, although the competition for quality audit jobs is stronger than for quality advising. In addition to senior executives, A&R employees are either staff or managers. Staff employees are usually younger with less experience. Managers, who oversee the staff on jobs, are more experienced. The average hourly wage is $60 for staff and $150 for managers. (Both staff and managers are paid an annual salary; these hourly costs are based on 2,000 average annual hours worked.) Staff are expected to spend at least 90 percent of their time on billable work. Because of administrative work associated with supervising the staff and…arrow_forward
- A Company uses a job order costing system and estimated it will have direct materials cost of $86,000 and $100,000 of direct labor cost next year. The company estimates its overhead next year will be $69,000. It also expects to incur 28,600 machine hours. If the company bases applied overhead on machine hours, its predetermined overhead rate for the next period should be (roun your answer to two decimal places): O $1.45/MH. O $0.69/MH. $2.99 per MH. O $2.41 per MH.arrow_forwardEmKay Company is divided into two departments for accounting purposes. The direct labor hours and overhead costs for the last year are as follows: What selling price should the company quote on Job Order A54 if thefollowing conditions apply? Raw material costs are estimated as $750. Estimated direct labor hours required in Departments A and B are 25 hours and 50 hours, respectively. Workers in both departments earn $15 per hour. Overhead costs in each department are allocated based on an overhead rate per direct labor hour. Profit is to be 25% of total cost.arrow_forwardCavy Company estimates that total factory overhead costs will be $685,938 for the year. Direct labor hours are estimated to be 109,400. a. Determine the predetermined factory overhead rate. Round your answer to the nearest cent.$fill in the blank 23d34d049fd4031_1 b. Determine the amount of factory overhead applied to Job 345 if the amount of direct labor hours is 1,200 and Job 777 if the amount of direct labor hours is 3,300. Job 345 $fill in the blank 23d34d049fd4031_2 Job 777 $fill in the blank 23d34d049fd4031_3 c. Prepare the journal entry to apply factory overhead for April according to the predetermined overhead rate. fill in the blank 919f7901300ffaf_2 fill in the blank 919f7901300ffaf_4arrow_forward
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