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
Nady [450]
3 years ago
8

Resource Room prints custom training material for corporations. The business was started January 1, 2017. The company uses a nor

mal-costing system. It has two direct-cost pools, materials and labor, and one indirect-cost pool, overhead. Overhead is charged to printing jobs on the basis of direct labor cost. The following information is available for 2017.
Budgeted direct labor costs……………$190,000
Budgeted overhead costs………………$266,000
Costs of actual material used………….$158,000
Actual direct labor costs…………………..$175,000
Actual overhead costs…………………….$247,200

There were two jobs in process on December 31, 2017: Job 11 and Job 12. Costs added to each job as of December 31 are as follows:

Direct Material Direct Labour
Job 11 $4,720 $5,700
Job 12 $5,090 $6,900

Resource Room has no finished-goods inventories because all printing jobs are transferred to cost of goods sold when completed.

Required:
a. Compute the overhead allocation rate.
b. Calculate the balance in ending work in process and cost of goods sold before any adjustments for under- or overallocated overhead.
c. Calculate under- or overallocated overhead.
d. Calculate the ending balances in work in process and cost of goods sold if the under- or overallocated overhead amount is as follows:

i. Written off to cost of goods sold
ii. Prorated using the overhead allocated in 2017 (before proration) in the ending balances of cost of goods sold and work-in-process control accounts

g. Which of the methods in requirement 4 would you choose? Explain.
Business
1 answer:
nadya68 [22]3 years ago
3 0

Answer:

Budgeted Overhead Cost          266,000          

Budgeted Labor Cost                   190,000          

Recovery rate                       =266000/190000          

Recovery rate per labor cost     1.40          

Actual Material                             158,000          

Actual labor                                       175,000          

WIP closing                         Material    Labor          

Job 11                                4,720    5,700          

Job 12                                 5,090    6,900          

Total                                  9,810    12,600          

Transfer to Finished= Total-WIP            

Actual Material                 148,190          

Actual labor                         162,400          

Category                    Finished    WIP           Total        

Material                             148,190     9,810          158,000        

Labor                             162,400     12,600   175,000        

Overhead-Recovered      227,360      17,640     245,000

@ 140% of labor        

Balance before                537,950       40,050     578,000

adjustment to overhead

under-allocation        

Option 1-Underallocated     2,200                                     2,200  

overhead (247200-245000)

     

Balance after adjusting      540,150       40,050     580,200

overhead under-allocation        

Option 2-Underallocated        2,042           158      2,200

overhead in overhead allocated rate

       

2200*227360/245000            

2200*17640/245000            

Balance before adjustment          537,950          40,050     578,000

to overhead under-allocation        

Balance after adjusting                 539,992          40,208     580,200  

overhead under-allocation          

g. the option 2 will be chosen because a careful look at the underallocated overhead is similar to 2017 so the charge should be levied on all activity

Explanation:

Budgeted Overhead Cost          266,000          

Budgeted Labor Cost                   190,000          

Recovery rate                       =266000/190000          

Recovery rate per labor cost     1.40          

Actual Material                             158,000          

Actual labor                                       175,000          

WIP closing                         Material    Labor          

Job 11                                4,720    5,700          

Job 12                                 5,090    6,900          

Total                                  9,810    12,600          

Transfer to Finished= Total-WIP            

Actual Material                 148,190          

Actual labor                         162,400          

Category                    Finished    WIP           Total        

Material                             148,190     9,810          158,000        

Labor                             162,400     12,600   175,000        

Overhead-Recovered      227,360      17,640     245,000

@ 140% of labor        

Balance before                537,950       40,050     578,000

adjustment to overhead

under-allocation        

Option 1-Underallocated     2,200                                     2,200  

overhead (247200-245000)

     

Balance after adjusting      540,150       40,050     580,200

overhead under-allocation        

Option 2-Underallocated        2,042           158      2,200

overhead in overhead allocated rate

       

2200*227360/245000            

2200*17640/245000            

Balance before adjustment          537,950          40,050     578,000

to overhead under-allocation        

Balance after adjusting                 539,992          40,208     580,200  

overhead under-allocation          

g. the option 2 will be chosen because a careful look at the underallocated overhead is similar to 2017 so the charge should be levied on all activity

You might be interested in
The cost of equity is ________. the interest associated with debt the rate of return required by investors to incentivize them t
kykrilka [37]

Answer:

If an = 3n - 2 , find a2

Explanation:

If an = 3n - 2 , find a2If an = 3n - 2 , find a2

3 0
3 years ago
What is the function of a 3-compartment sink?
lord [1]
One for washing one for rinsing and one for sanitizing the dishes
8 0
3 years ago
During fiscal 2016, mattel had sales of $5,456,650, total expenses of $5,138,628 and gross profit of $2,554,391. What was mattel
liberstina [14]

Calculation of Cost of Sales for Mattel for the year 2016:


It is given that Mattel had sales of $5,456,650, and gross profit of $5,456,650for the year 2016. The cost of sales can be calculated with the help of following formula:

Cost of Sales = Sales – Gross Profit

Cost of Sales = 5,456,650-5,456,650

Cost of Sales = 2,902,259


Hence the Cost of Sales is 2,902,259 ($ in thousands).





4 0
3 years ago
Discuss the propriety of showing: a) treasury stock as an asset - b) ""gain"" or ""loss"" on sale of treasury stock as additions
r-ruslan [8.4K]

Answer:

a. Treasury stock cannot be shown as an asset because a company cannot buy itself.

b) Gain or loss on sale of treasury stock is not to be treated as income, it should be added or subtracted from share capital because it is a capital transaction.

c). Treasury stock is not an asset. Dividends received from treasury stock cannot be treated as income, it is only assets that generates income.

Explanation:

When corporations for some strategic reasons and the desire to maintain and stabilize the shareholders wealth decide to buy back some of its shares, that is what is known as treasury stock. It is also called reacquired stock

a. The treasury stock is like a corporation acquiring itself, so it cannot be shown as an asset, it is only a reclassification within the same balance sheet.

b. Gains or loss on sale of treasury stock is not an income transaction, it is a transaction that affects the share capital of the corporation and must be charged to the share capital not the income.

c. Since treasury stock is not an asset, dividend received on treasury stock is not to be treated as income, it is only assets that generates income. it should affect retained earnings.

6 0
3 years ago
A the production possibilities frontier (PPF) is bowed outward as a result of:_________
vodomira [7]

Answer: 2) increasing opportunity costs.

Explanation:

The Production Possibilities frontier is bowed out as it shows that for one more unit of a good to be produced, an additional unit of the other good must be given up.

This represents increasing opportunity costs because opportunity cost is the cost we incur for choosing one alternative over another. By producing more and more of one good, we give up more and more of the other good which means that our opportunity cost rises.

8 0
3 years ago
Other questions:
  • How does the skin protect the body from illness chek all that apply
    8·1 answer
  • ___the agency responsible for monitoring illbess and outbreak of widespread infection in the united states. Multiple choice
    5·1 answer
  • Real property is _____.
    5·2 answers
  • Aaron works as a marketing associate for Media Cloud Inc. He is currently working on an important project with a tight deadline.
    7·1 answer
  • Presented below is a list of costs and expenses usually incurred by Barnum Corporation, a manufacturer of furniture, in its fact
    15·1 answer
  • Marketing intermediaries that solicit orders from retailers or other wholesalers and have the products delivered directly from t
    12·1 answer
  • Sparkman Co. filed a bankruptcy petition and liquidated its noncash assets. Sparkman was paying forty cents on the dollar for un
    13·1 answer
  • The aggregate demand curve of a small country called tynika is drawn as ad1.the combination of current real gdp and aggregate pr
    6·1 answer
  • Plz help I will make u brainleist!!four points difference between engineering and architecture​
    9·1 answer
  • Which of the following caused readership of The Boston Globe to plummet?
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!