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Savatey [412]
3 years ago
15

Exercise 2-10 Applying Overhead Cost to a Job [LO2-2] Sigma Corporation applies overhead cost to jobs on the basis of direct lab

or cost. Job V, which was started and completed during the current period, shows charges of $5,000 for direct materials, $8,000 for direct labor, and $6,000 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $2,500 for direct materials and $4,000 for direct labor. Required: 1a. Should any overhead cost be applied to Job W at year-end? Yes No 1b. How much overhead cost should be applied to Job W? 2. How will the costs included in Job W’s job cost sheet be reported within Sigma Corporation’s financial statements at the end of the year? Raw Materials Work-in-Process Finished Goods
Business
1 answer:
OlgaM077 [116]3 years ago
6 0

Answer:

See explanations below.

Explanation:

1. Yes. Overhead should be applied to job W at year-end. Overhead is applied to every jobs whether or not they are completed at year end.

b. To calculate the amount of overhead to be applied to job W, we need to calculate first the overhead application rate based on direct labor cost through job V.

Direct labor cost. $8,000

Overhead applied $6,000

Overhead rate = [ Overhead applied / Direct labor cost ] × 100

= [6,000/8,000] × 100

= 75%

Overhead to be applied to job W

Direct labor cost $4,000

Overhead rate 75%

Overhead to be applied = $3,000

It therefore means that $3,000 should be applied to job W.

2. Because job W was not completed at the year end, it would then be included in the work in process inventory in the financial statements of Sigma Corporation at year end.

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Suppose a country has a money demand function ( M/P )^d = kY , where k is a constant parameter. The money supply grows by 12 per
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Answer:

Part A)

Inflation Rate = 12% - 4%

Inflation rate = 8%

Part B)

If the genuine income was higher, the expansion level would diminish subject to the buyer's spending limitations. As such, they will make a similar measure of cash yet their buying power per dollar will increase.  

Part C)

in the current scenario, increment in cash would cause the expansion rate to increment. On the off chance that we consider the past and occasions, for example, hyperinflation, take a gander at what the reason was. Governments were printing cash to pay obligations, which was diminishing the estimation of their money. Right now, would get paid and race to the store to go through their cash in light of the fact that their dollars today may just be worth 50 pennies tomorrow or at times, the following hour. Thus, our answer is if the speed of cash continues developing, expansion will continue developing also. These two factors are star repetitive with one another significance they move together.

5 0
3 years ago
Enos Printing Corp. uses a job order cost system. The following data summarize the operations related to the first quarter’s pro
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Answer:

raw materials    197900

accounts payable   197900

WIP   161830

factory overhead   5270

raw materials   167100

WIP   85500

factory overhead   7600

wages payables   93100

factory overhead   53000

accounts payable   53000

factory overhead   17150

acc. Dep-equipment   17150

dep expense*   14800

acc. Dep- Off Building   14800

WIP**   70965

factory overhead   70965

Finished Goods***   251747

WIP inventory   251747

Explanation:

* as the building is not related to the manufacturing process we cannot capitalized through inventory We will record as cost ofo the period therefore, depreciation expense

** the aplied overhead will be the amount of direct labor added during the period time 83%

85,500 x 83% = 85,500 * 0.83 = 70,965

*** we will have to add up the jobs cost to detemrinate how much of the work in process inventory becomes finished good

Job  Materials // Labor // Overhead

A20 $  37,740  $  19,200 + 19,200 x 0.83

A21  $ 44,320  $ 23,600 + 23,600 x 0.83

A23 $  41,770   $  27,100  + 27,100 x 0.83

Total 251,747

4 0
3 years ago
On September 1, 2020, Windsor Company sold at 104 (plus accrued interest) 3,840 of its 8%, 10-year, $1,000 face value, nonconver
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Answer:

total sales value = 3,840 x $1,000 = $3,840,000 x 1.04 = $3,993,600

since each bond carried 2 detachable stock warrants, we must include in the bond issuance the value of the stock warrants = 3,840 bonds x 2 warrants x $2 per warrant = $15,360

the premium on bonds payable = total cash received - bonds payable - stock warrants = $3,993,600 - $3,840,000 - $15,360 = $138,240

the journal entry for recording the bond issuance:

September 1, 2020, 3,840 8% bonds issued

Dr Cash 3,993,600

    Cr Bonds payable 3,840,000

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5 0
3 years ago
1. Why do firms choose to make large increases in their dividends or start a stock repurchase program?2. Why do firms choose to
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Answer with Explanation:

Requirement 1:

The companies whose products are in growth phase or the company is cash cow which has a well diversified products does not have to invest in adding a new product line because their earnings are already stable enough or that they don't have to invest much because sufficient profits are left after extracting for investments. Increase in dividends has two meanings that either the management is confident enough that they think that the company will be able to earn more in the future and they will achieve better position in future which is a good news in the stock exchange and for investors as well and investor invest more in the company's ordinary stock.

Company start Stock repurchase program which is to buyback its previously issued ordinary shares which is because the management thinks that the stock is undervalued and thus they repurchase their ordinary shares so that the stock will go up in near future and this will benefit the company and the existing shareholders as well. This also helps in increasing earnings per share, return on equity, etc because the equity is reduced by share repurchase program.

Stock repurchase program is also run by the organization because they don't find any attractive opportunities. This means that the company does not have any large investment opportunities which means growth in revenue and profit can not be expected in the future years. Thus when the company starts repurchasing of stock the investor starts selling their stocks.

Requirement 2:

If the company thinks that they can increase the worth of shareholders beyond their shareholder's expectation then they don't pay dividend and invest in projects to increase the sales growth, profits and market share significantly in the coming future.

Some long term shareholders think this is a great news whereas short term investors who are looking for dividends will sell the stock which means that the stock value may fall in near future but in long run the company stock value increase when the investment will start showing its results.

8 0
3 years ago
The average of first 10 even number is​
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Answer:

11

Explanation:

7 0
3 years ago
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