Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $300,000 for the year, and machine usage is estimated at 125,000 of hours.
For the year, $322,000 of overhead costs are incurred and 130,0000 hours are used.
Instructions
- Compute the manufacturing overhead rate for the year.
- What is the amount of under or over-applied overhead at December 31?
- Prepare the adjusting entry to assign the under or over-applied overhead for the year to cost of goods sold.
| Estimated overhead | $960,000 |
| Actual overhead | $982,000 |
| Estimated decorator hours | 40,000 |
| Actual decorator hours | 40,500 |
The company uses Operating Overhead in place of Manufacturing Overhead
Instructions
- 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.
Overhead costs are applied to jobs on the basis of auditor hours, and the predeterminer overhead rate is $5 per auditor hour. The Lyn job is the only incomplete job at the end of November. Actual overhead for the month was $11,000.
Instructions
- Determine the cost of each job.
- Indicate the balance of the Service Contracts in Process account at the end of November.
- Calculate the ending balanace of the Operating Overhead account for November.
| Manufacturing Costs Assigned | ||||
| Job Number | April | May | June | Month Completed |
| 10 | $5,200 | $4,400 | May | |
| 11 | 4,100 | 3,900 | $2,000 | June |
| 12 | 1,200 | April | ||
| 13 | 4,700 | 4,500 | June | |
| 14 | 5,900 | 3,600 | Not Complete | |
Job 12 was completed in April. Job 10 was completed in May. Jobs 11 and 13 were completed in June. Each job was sold for 25% above its cost in the month following completion.
Instructions
- What is the balance in Work in Process Inventory at the end of each month?
- What is the balance in Finished Goods Inventory at the end of each month?
- What is the gross profit for May, June, and July?
- May 1 inventories - finished goods $12,600, work in process $14,700, and raw materials $8,200.
- May 31 inventories - finished goods $9,500, work in process $15,900, and raw materials $7,100
- Debit postings to work in process were direct materials $62,400, direct labor $50,000, and manufacturing overhead applied $40,000.
- Sales revenue totaled $215,000
Instructions
- Prepare a condensed cost of goods manufactured schedule.
- Prepare an income statement for May through gross profit
- Indicate the balance sheet presentation of the manufacturing inventories at Ma 31, 2020.
- Materials purchased on account $192, 000, and factory wages incurred $87,300.
- Materials requisitioned and factory labor used by job:
Job Number Materials Factory Labor A20 $35,240 $18,000 A21 42,920 22,000 A22 36,100 15,000 A23 39,270 25,000 General Factory Use 4,470 7,300 $158,000 $87,300 - manufacturing overhead costs incurred on account $49,500
- Depreciation on Factory equipment $14,550.
- Depreciation on the company's office building was $14,300.
- Manufacturing overhead rate is 90% of direct labor costs.
- Jobs completed during the quarter: A20, A21, and A23.
Instructions
Prepare entries to record the operations summarized above. (Prepare a schedule showing the individual cost elements and total cost for each job in item 7.).
- Purchased raw materials on account $46,300.
- Raw materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.
- Factory labor cost incurred were $59,000, of which $51,000 pertained to factory wages payable and $8,900 pertained to employer payroll taxes payable.
- Time tickets indicated that $54,000 was direct labor and $5,900 was indirect labor.
- Manufacturing overhead costs incurred on account were $80,500.
- Depreciation on the company's office building was $8,1`00.
- Manufacturing overhead was applied at the rate of 150% of direct labor costs.
- Goods costing $88,000 were completed and transferred to finished goods.
- Finished goods costing $75,000 to manufacture were sold on account $103,000.
Instructions
Journalize the transactions.
Instructions
- Answer the following questions.
- What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?
- What is the predetermined manufacturing overhead rate?
- What are the total cost and the unit cost of the completed job? (Round unit cost to nearest cent.)
- Prepare the entry to record the completion of the job.
Lott Company uses a job order cost system and applies overhead to productions on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in the process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,00, and manufacturing overhead $16,000. As of January 1, Job 49 had been completed at a cost of $90,000 and was part of the finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account.
during the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month.
- Purchased additional raw materials of $90,000 on account
- Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes.
- Incurred manufacturing overhead costs as follows: indirect materials $17,000, indirect labor $20,000, depreciation expense on equipment $12,000, and various other manufacturing overhead costs on account $16,000.
- Assigned direct materials and direct labor to jobs as follows.
Instructions
- Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year.
- Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50.
- Prepare the journal entries to record the purchase of raw materials, the factor labor costs incurred, and the manufacturing overhead costs incurred during the month of January.
- Prepare the journal entries to record the assignment of direct materials, direct labor and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.
- Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the sale of any job(s) during the month
- What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of?
- What is the amount of over or underapplied overhead?