1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Citrus2011 [14]
3 years ago
7

In December 2016, Learer Company’s manager estimated next year’s total direct labor cost assuming 40 persons working an average

of 3,000 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for 2017.
Indirect labor $321,200
Factory supervision 156,000
Rent on factory building 142,000
Factory utilities 90,000
Factory insurance expired 70,000
Depreciation—Factory equipment 490,000
Repairs expense—Factory equipment 62,000
Factory supplies used 70,800
Miscellaneous production costs 38,000
Total estimated overhead costs $1,440,000

At year-end, records show the company incurred $1,542,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $606,000; Job 202, $565,000; Job 203, $300,000; Job 204, $718,000; and Job 205, $316,000. In addition, Job 206 is in process at the end of the year and had been charged $19,000 for direct labor. No jobs were in process at the beginning of the year. The company’s predetermined overhead rate is based on direct labor cost.
Required:
1-a. Determine the predetermined overhead rate for 2017.
1-b. Determine the total overhead cost applied to each of the six jobs during 2017.
1-c. Determine the over- or underapplied overhead at year-end 2017.
2. Assuming that any over- or underapplied overhead is not material, prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold at the end of 2017.
Business
2 answers:
nignag [31]3 years ago
5 0

Answer:

1a. Predetermined Overhead Rate= 60%

Explanation:

Predetermined Overhead Rate=

Estinated overhead cost/Direct labor cost= $1,440,000/(40*$20*3000)

=60%

1b. Total Overhead Cost applied to each job

Job No Direct Labor Applied FOH60%

201 606,000 363,600

202 565,000 339,000

203 300,000 180,000

204 718,000 430,800

205 316,000 189,600

206 19,000 11,400

Total $2,524,000 $1,513,600

Overhead cost applied=

Direct Labor (1.b) * Predetermine overhead rate (1.a)

example:

(Job No. 201) 606,000 * 0.6 = 363,600

1c. Over applied or under applied at year end 2017

Actual Over head cost $1,542,000

Less:Overhead Appied - $1,513,600

Under applied over head $28,400

2. Adjusting Entry

Date Account Title Debit Credit

Dec Cost of goods $28,400 -

-31 sold

Factory - $28,400

Overhead

professor190 [17]3 years ago
3 0

Answer:

a) the predetermined overhead rate for 2017 is 60%

b) the total overhead cost is $1,514,400

c) Underapplied overhead is $27600

d)

Date                        General journal                     Debit                   Credit

Dec. 31                    Cost of goods sold               $36,400

                               Factory overhead                                              $36,400

Explanation:

a) the predetermined overhead rate for 2017 is the ratio of estimated overhead cost to estimated direct labor cost

estimated direct labor cost = 40 persons × 3000 hours × $20 per hour = $2,400,000

the predetermined overhead rate for 2017 = estimated overhead cost / estimated direct labor cost = $1440000 / $2400000 = 0.6 = 60%

the predetermined overhead rate for 2017 is 60%

b) Overhead cost = direct labor × overhead rate

Job 201 Overhead cost =$606000 × 0.6 = $363600

Job 202 Overhead cost =$565000 × 0.6 = $339000

Job 203 Overhead cost =$300000 × 0.6 = $180000

Job 204 Overhead cost =$718000 × 0.6 = $430800

Job 205 Overhead cost =$316000 × 0.6 = $189600  

Job 206 Overhead cost =$19000 × 0.6 = $11400

the total overhead cost = $363600 + $339000 + $180000 + $430800 + $189600 + $11400 = $1,514,400

the total overhead cost is $1,514,400

c) actual overhead costs = $1,542,000

the total overhead cost = $1,514,400

Underapplied overhead  = actual overhead costs - total overhead cost = $1542000 - $1514400 = $27600

d)

Date                        General journal                     Debit                   Credit

Dec. 31                    Cost of goods sold               $36,400

                               Factory overhead                                              $36,400

You might be interested in
during an external information search, a consumer is most likely to enlarge his search and consider more alternative brands when
iren2701 [21]

During an external information search, a consumer is most likely to enlarge his search and consider more alternative brands when the<u> perceived risk of the </u><u>product or service </u><u>to be purchased increases.</u>

This is further explained below.

<h3>What is <u>a product</u>?</h3>

Generally, A physical thing that is offered for sale for purchase, attention, or consumption is referred to as a commodity.

On the other hand, an intangible item that comes from the work of one or more humans is referred to as a service.

In conclusion, When a customer perceives an increased level of risk associated with the product or service that will be bought, he is more likely to broaden the scope of his search and take into consideration a greater number of alternative brands.

This occurs during an external information search.

Read more about <u>product </u>

<u>brainly.com/question/22852400</u>

#SPJ1

8 0
11 months ago
Suppose French chocolate soufflé is an inferior good. When income increases and the number of producers in the market decreases
Vadim26 [7]

Answer:

d) The change to the equilibrium price of French chocolate souffle is ambiguous and the equilibrium quantity of French chocolate souffle falls

Explanation:

Inferior goods are those goods whose demand falls with the rise in the income of the consumer.

As per the given case, French chocolate souffle is an inferior good. When income of the consumer rises, his demand for French chocolate souffle will fall.

Similarly, when producers of such an inferior good decrease, the supply of French chocolate souffle shall fall.

With respect to the original equilibrium level, the demand curve shall experience a leftward shift i.e decrease whereas the supply curve too experiences a leftward shift i.e supply falls.

At the new equilibrium level, definitely the equilibrium quantity shall fall, but the change in equilibrium price cannot be ascertained as per the given information.

4 0
3 years ago
Anderson Corporation has purchased a group of assets for $16,600.
Sati [7]

Answer:

C.$ 8 comma 798$8,798

Explanation:

Given,

Purchase value = $16,600

Considering the relative values

Relative value of land = $6,500

Total relative value = 6500 + 2400 + 3400

                                = $12,300

Using the relative value to allocate the purchased value of the land

Purchased cost of land = (6500/12300) × 16,600

                                       = 0.53 × 16,600

                                      = $8,798

The amount that would be debited to the Land is $8,798 Option C

4 0
3 years ago
Assume the following sales data for a company:
ella [17]

Answer:

b. 30%

Explanation:

The computation of the percentage increased in sales from the previous year to the current year is shown below:

= (Current year Sale - Preceding year Sale) ÷ (Preceding year Sale )

= ($325,000 - $250,000) ÷ ($250,000)

= ($75,000) ÷ ($250,000)

= 30%

Hence, the correct option is b. 30%

We simply applied the above formula to determine the percentage increased in sales

5 0
3 years ago
The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production o
ivanzaharov [21]

Answer:

54,000 chairs

Explanation:

The computation of the number of chairs at the beginning of the month is shown below:

Inventory at the beginning of the month = Units completed and transferred  + ending inventory units - Units started

= 180,000 chairs + 21,000 chairs - 147,000 chairs

= 54,000 chairs

We simply applied the above formula to find out the inventory at the beginning of the month

7 0
3 years ago
Other questions:
  • A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends a direction
    9·1 answer
  • Midwest Sales, Inc. has a stated written policy by which all similarly situated employees are to be paid the same salary. John D
    14·1 answer
  • Terry, who has been an employee in your department for about six months, can be careless about safety. He hasn't been involved i
    6·2 answers
  • How is the spending multiplier effect related to demand-side economics?
    12·1 answer
  • Consider the following three companies and their strategies.• Company A is an established database management company that acqui
    7·1 answer
  • If you are stopped by a police officer for driving without having all passengers under the age of 18 properly restraint, you can
    13·1 answer
  • Rebecca, a game artist at a game designing company, receives her bonus 10 days before or 10 days after she receives her monthly
    14·1 answer
  • Murphy Printers ​(MP) manufactures printers. Assume that MP recently paid $ 500 comma 000 for a patent on a new laser printer. A
    10·1 answer
  • Mary Beth purchased her primary residence for $280,000.00. As part of the closing procedure, she paid $2,900 in a loan originati
    6·1 answer
  • What are the unique financial reporting implications of the partnership entity in comparison with the proprietorship and corpora
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!