Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 4, Problem 4TP
If a company bases its predetermined overhead rate on 100,000 machine hours, and It actually has 100,000 machine hours, would there be an under applied or over applied overhead?
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Students have asked these similar questions
If annual overhead costs are expected to be $ 784000 and direct labor costs are expected to be $ 1000000, then if the activity base is direct labor costs:
a. a predetermined overhead rate cannot be determined.
b. for every dollar of manufacturing overhead, 1.28 cents of direct labor will be assigned.
c. for every dollar of direct labor, 78.4 cents of manufacturing overhead will be assigned.
d. $ 1.28 is the predetermined overhead rate.
Goodman Company has recently tried to improve its analysis for its
manufacturing process. Units started into production equaled 50,000 and
ending work in process equaled 7,000 units. Goodman had no beginning work
in process inventory. Conversion costs are applied equally throughout
production, and materials are applied at the beginning of the process. How
much is the materials cost per unit if ending work in process was 40% complete
and total materials costs equaled $500,000?
O $10.00
O $9.77
O $8.77
O $11.63
Using the pre-determined overhead rate calculated above, calculate the overhead that would be allocated to a product that uses 3.5 hours of machine time. What will happen if actual overhead costs turn out to be higher or lower than this calculation?
predetermined overhead rate calculated above: $25/ hour of machine run time
Chapter 4 Solutions
Principles of Accounting Volume 2
Ch. 4 - Which of the following product situations is...Ch. 4 - A job order costing system is most likely used by...Ch. 4 - Which of the following is a prime cost? A....Ch. 4 - Which of the following is a conversion cost? raw...Ch. 4 - During production, to what are the costs in job...Ch. 4 - Which document lists the inventory that will be...Ch. 4 - Which document shows the cost of direct materials,...Ch. 4 - Which document lists the total direct materials...Ch. 4 - Which document lists the total direct labor used...Ch. 4 - Assigning indirect costs to specific jobs is...
Ch. 4 - In a job order cost system, which account shows...Ch. 4 - In a job order cost system, raw materials...Ch. 4 - In a job order cost system, overhead applied is...Ch. 4 - In a job order cost system, factory wage expense...Ch. 4 - In a job order cost system, utility expense...Ch. 4 - In a job order cost system, indirect labor...Ch. 4 - The activity base for service industries is most...Ch. 4 - A printing company manufactures notebooks of...Ch. 4 - Burnham Industries incurs these costs for the...Ch. 4 - Chocos Chocolates incurs these costs for the...Ch. 4 - How do job order costing and process costing...Ch. 4 - Why are product costs assigned to the product and...Ch. 4 - Is the cost of goods manufactured the same as the...Ch. 4 - From beginning to end, place these items in the...Ch. 4 - How is the predetermined overhead rate determined?Ch. 4 - How is the predetermined overhead rate applied?Ch. 4 - Why are the overhead costs first accumulated in...Ch. 4 - Why is the manufacturing overhead account debited...Ch. 4 - Match the concept on the left to its correct...Ch. 4 - When compared to manufacturing companies, service...Ch. 4 - Little Things manufactures toys. For each item...Ch. 4 - Table 4.3 shows a list of expenses involved in the...Ch. 4 - Burnham Industries incurs these costs for the...Ch. 4 - Marzons records show raw materials Inventory had a...Ch. 4 - Sterlings records show the work in process...Ch. 4 - Logo Gear purchased $2,250 worth of merchandise...Ch. 4 - A company estimates its manufacturing overhead...Ch. 4 - Job order cost sheets show the following costs...Ch. 4 - A new company started production. Job 10 was...Ch. 4 - K company production was working on Job 1 and Job...Ch. 4 - A company has the following transactions during...Ch. 4 - During the month, Job AB2 used specialized...Ch. 4 - Job 113 was completed at a cost of $5,000, and Job...Ch. 4 - A companys Individual job sheets show these costs:...Ch. 4 - A summary of material requisition slips and time...Ch. 4 - Abuah Goods manufactures clothing. For each item...Ch. 4 - Chocos Chocolates incurs the following costs for...Ch. 4 - The table shows a list of expenses involved in the...Ch. 4 - Masonrys records show the raw materials inventory...Ch. 4 - Steinways records show their work in process...Ch. 4 - Langstons purchased $3,100 of merchandise during...Ch. 4 - A company estimates its manufacturing overhead...Ch. 4 - Job order cost sheets show the following costs...Ch. 4 - A new company started production. Job 1 was...Ch. 4 - Inez has the following information relating to Job...Ch. 4 - A company has the following information relating...Ch. 4 - A company has the following transactions during...Ch. 4 - During the month, Job Arch2 used specialized...Ch. 4 - Job 113 was completed at a cost of $7,500, and Job...Ch. 4 - A companys individual job sheets show these costs:...Ch. 4 - A summary of materials requisition slips and time...Ch. 4 - For each item listed, state whether a job order...Ch. 4 - York Company Is a machine shop that estimated...Ch. 4 - Pocono Cement Forms expects $900,000 in overhead...Ch. 4 - Job cost sheets show the following information:...Ch. 4 - Complete the information in the cost computations...Ch. 4 - During the year, a company purchased raw materials...Ch. 4 - Freeman Furnishings has summarized its data as...Ch. 4 - Coops Stoops estimated its annual overhead to be...Ch. 4 - MountaIn Peaks applies overhead on the basis of...Ch. 4 - The actual overhead for a company is $74,539....Ch. 4 - When setting its predetermined overhead...Ch. 4 - The following data summarize the operations during...Ch. 4 - The following events occurred during March for...Ch. 4 - A movie production studio incurred the following...Ch. 4 - For each item listed, state whether a job order...Ch. 4 - Rulers Company is a neon sign company that...Ch. 4 - Event Forms expects $120,000 in overhead during...Ch. 4 - Summary information from a companys job cost...Ch. 4 - Complete the information in the cost computations...Ch. 4 - During the year, a company purchased raw materials...Ch. 4 - Freeman Furnishings has summarized its data as...Ch. 4 - Queen Bees Honey, Inc., estimated its annual...Ch. 4 - Mountain Tops applies overhead on the basis of...Ch. 4 - The actual overhead for a company is $73,175....Ch. 4 - When setting its predetermined overhead...Ch. 4 - The following data summarize the operations during...Ch. 4 - The Following events occurred during March for...Ch. 4 - A leather repair shop incurred the following...Ch. 4 - Can a company use both job order costing and...Ch. 4 - If a job order cost system tracks the direct...Ch. 4 - What are the similarities in calculating the cost...Ch. 4 - If a company bases its predetermined overhead rate...Ch. 4 - How do the job cost sheets act as a subsidiary...Ch. 4 - How is a job order cost system used in a service...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Calculate activity rate for general factory overhead using direct labor hours. How much of the $2,496,500 manufacturing overhead would be allocated to the Delta product? How much would be allocated to the sigma product?arrow_forwardA company expected its annual overhead costs to be $2700000 and direct labor costs to be $1500000. Actual overhead was $2650000, and actual labor costs totaled $1600000. How much is the company’s predetermined overhead rate to the nearest cent? $1.69 $1.80 $1.66 $1.77arrow_forwardWhy is 4,000 used for the variable Manufacturing Overhead?arrow_forward
- A company has the following information relating to its production costs: Compute the actual and applied overhead using the companys predetermined overhead rate of $23.92 per machine hour. Was the overhead over applied or under applied, and by how much?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_forwardWhy would a manufacturing company with multiple production departments still prefer to use a single plantwide overhead rate?arrow_forward
- Characteristics of Production Process, Cost Measurement Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,720 Direct labor cost $67,200 Overhead cost $50,400 During the year, the following actual amounts were experienced: Number of direct labor hours 6,045 Direct labor incurred $66,495 Overhead incurred $50,500 Required: 1. Should EcoScape use process costing or job-order costing? 2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours, What is the overhead rate? Round your answer to the nearest cent. per direct labor hourarrow_forwardA company uses direct labor costs to apply overhead. Its production costs for the period are: direct materials, $45,000; direct labor, $35,000; and overhead applied, $38,500. What is its predetermined overhead rate?arrow_forwardThis is a cost accounting question. What are the general ledger accounts required for the following scenario: Applied overhead on the basis of 110% of direct labor costs? I think it might be applied overhead control, but I am unsure of the credit account.arrow_forward
- 1.What was the company’s plantwide predetermined overhead rate? 2.How much manufacturing overhead was applied to Job P and how much was applied to Job Q? 3.What was the total manufacturing cost assigned to Job P? 4. If Job P included 20 units, what was its unit product cost? 5.What was the total manufacturing cost assigned to Job Q? 6. If Job Q included 30 units, what was its unit product cost? 7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? 8. What was Sweeten Company’s cost of goods sold for March? 9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? 10. How much manufacturing…arrow_forward2. Delph Company uses a job-order costing system and has two manufacturing departments – Molding and Fabrication. The company provided the following estimates at the beginning of the year: Molding Fabrication Total Machine-hours 20,000 30,000 50,000 Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour $700,000 $210,000 $910,000 $3.00 $1.00 During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs–Job D-70 and Job C-200. It provided the following information related to those two jobs: Job D-70 Direct materials cost Direct labor cost Machine-hours Molding $375,000 $200,000 14,000 Fabrication $325000 Total $700000 $360,000 20,000 $160,000 6,000 Job C -200 Direct materials cost Direct labor cost Machine-hours Molding $300,000 $175,000 6,000 Fabrication $250,000 $225,000 24,000 Total $550,000 $400,000 30,000 Delph had no underapplied or overapplied manufacturing overhead during the year.arrow_forward1. Logo Inc. has two data services departments (Systems and Facilities) that provide support to the company's three production departments (Machining, Assembly, and Finishing). The overhead costs of the Systems Department are allocated to other departments on the basis of computer usage hours. The overhead costs of the Facilities Department are allocated based on square feet occupied (in thousands). Other information pertaining to Logo is as follows. Department Overhead Computer Usage Hours Square Feet Occupied Systems Facilities $200,000 300 1,000 100,000 900 600 Machining Assembly Finishing Totals 400,000 3,600 2,000 550,000 1,800 3,000 620,000 2,700 5,000 9,300 11,600arrow_forward
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