Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 4, Problem 4.35E
Proration of
| Budgeted manufacturing overhead cost | $25,000 |
| Budgeted direct manufacturing labor cost | $250,000 |
| Actual manufacturing overhead cost | $117,000 |
| Actual direct manufacturing labor cost | $228,000 |
Inventory balances on December 31, 2017, were as follows:
| Account | Ending balance | 2017 direct manufacturing labor cost in ending balance |
| Work in process | $50,700 | $20,520 |
| Finished goods | 245,050 | 59,280 |
| Cost of goods sold | 549,250 | 148,200 |
- 1. Calculate the manufacturing overhead allocation rate.
Required
- 2. Compute the amount of under- or overallocated manufacturing overhead.
- 3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overallocated manufacturing overhead is as follows:
- a. Written off to cost of goods sold
- b. Prorated based on ending balances (before proration) in each of the three accounts
- c. Prorated based on the overhead allocated in 2017 in the ending balances (before proration) in each of the three accounts
- 4. Which method would you choose? Justify your answer.
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Dustin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dustin allocates manufacturing overhead costs using direct manufacturing labor costs. Dustin provides the following information:
Read the
requirements2.
Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017.(Enter your answer as a number [notas a percentage] rounded to two decimal places, X.XX.)
Actual manufacturing overhead rate
=
Budgeted manufacturing overhead rate
=
Requirement 2. During March, the job-cost record for Job 626 contained the following information:
Direct materials used
$60,000
Direct manufacturing labor costs
$30,000
Compute the cost of Job 626 using (a) actual costing and (b) normal costing.
Actual
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Direct manufacturing labor costs…
Mission Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be
allocated to the individual product lines from the information provided below (CMA adapted)
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Units produced
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Direct labor-hours per product line
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Chapter 4 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Which of the following does not accurately...Ch. 4 - Sturdy Manufacturing Co. assembled the following...Ch. 4 - For which of the following industries would...Ch. 4 - ABC Company uses job-order costing and has...Ch. 4 - Under Stanford Corporations job costing system,...Ch. 4 - (10 min) Job costing, process costing. In each of...Ch. 4 - Actual costing, normal costing, accounting for...Ch. 4 - Job costing, normal and actual costing. Atkinson...Ch. 4 - Budgeted manufacturing overhead rate, allocated...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Job costing, consulting firm. Frontier Partners, a...Ch. 4 - Time period used to compute indirect cost rates....Ch. 4 - Accounting for manufacturing overhead. Creative...Ch. 4 - Job costing, journal entries. The University of...Ch. 4 - Journal entries, T-accounts, and source documents....Ch. 4 - Job costing, journal entries. Donald Transport...Ch. 4 - Job costing, unit cost, ending work in process....Ch. 4 - Job costing; actual, normal, and variation from...Ch. 4 - Job costing; variation on actual, normal, and...Ch. 4 - Proration of overhead. The Ride-On-Wave Company...Ch. 4 - Job costing, accounting for manufacturing...Ch. 4 - Service industry, job costing, law firm. Kidman ...Ch. 4 - Service industry, job costing, two direct- and two...Ch. 4 - Proration of overhead. (Z. Iqbal, adapted) The Zaf...Ch. 4 - Normal costing, overhead allocation, working...Ch. 4 - Proration of overhead with two indirect cost...Ch. 4 - General ledger relationships, under- and...Ch. 4 - Overview of general ledger relationships. Estevez...Ch. 4 - Allocation and proration of overhead. Resource...Ch. 4 - (2530 min.) Job costing, ethics. Joseph Underwood...Ch. 4 - Job costingservice industry. Market Pulse performs...
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