Answer:
The amount of overhead debited to Work in Process Inventory should be: a. $182,00
Explanation:
The Overheads are Applied in the Manufacturing Costs as:
Budgeted Rate × Actual Activity for the Month
At the End of the Period we would need to determined whether this amount of overhead is Over or Under Applied by comparing it to the actual overheads incurred of $180,000 (given)
In our Case, the predetermined overhead rate is 70% of direct labor cost
<em>Thus we need to find the Direct Labor Cost first</em>:
Total Labor Costs $360,000
<em>Less </em>Indirect Labor Costs<em> </em>$100,000
Direct Labor Cost $260,000
<em>Therefore Overheads applied would be determined as:</em>
= $260,000 × 70%
= $182,000
Answer:
Product cost refers to the costs incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead. Product cost can also be considered the cost of the labor required to deliver a service to a customer.
Examples of product costs are direct materials, direct labor, and allocated factory overhead which are directly attributable to the product.
period cost is any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets. A period cost is more closely associated with the passage of time than with a transnational event. ... Instead, it is typically included within the selling and administrative expenses section of the income statement.
Examples of period costs are general and administrative expenses, such as rent, office depreciation, office supplies, and utilities. Period costs are sometimes broken out into additional subcategories for selling activities and administrative activities
They function as consumers and producers because while they work, they are creating goods/ providing services that contribute to the economy. When they get paid, they become consumers who buy goods/pay for services.
Answer:
a. FIFO - Inventory Used: $39900 Remaining Inventory: $14700
b. LIFO - Inventory Used: $41700 Remaining Inventory: $12900
c. Weighted Average Cost - Inventory Used: $40950 Remaining Inventory: $13650
Explanation:
Jan 01. Beginning inventory = 40 x $165 = $6600
Aug 13. Purchases 200 x $180 = $36000
Nov 30. Purchases 60 x $200 = $12000
Ending inventory = 75 units
Inventory Used = 300 – 75 = 225
(a) First-In-First-Out (FIFO)
This is the method where the inventory first received is the one that is used first. Common method when the inventory is perishable and would be wasted if left too long.
Inventory Used:
40 x $165 = $6600
185 x $180 = $33300
Total = $39900
Remaining Inventory:
15 x $180 = $2700
60 x $200 = $12000
Total = $14700
(b) Last-In-First-Out
Method whereby the inventory received latest is used first. Common in goods that are bulky. the inventory on top (latest purchased) is used first.
Inventory Used:
60 x $200 = $12000
165 x $180 = $29700
Total = $41700
Remaining Inventory:
40 x $165 = $6600
35 x $180 = $6300
Total = $12900
(c) Weighted Average Cost
This is whereby you divide the cost of goods sold by the number of units available for sale.
54,600 / 300 = $182
Inventory Used: 225 x $182 = $40950
Remaining inventory = 75 x $182 = $13650
Answer:
b) 2,388.22
Explanation:
Activity Cost Pool Activity Rates Activity Overhead cost
Processing customer 49.87 per order 10 498.7
orders
Assembling products 2.88 per assembly hour 580 1670.4
Setting up batches 18.26 per batch 12 <u> 219.12</u>
Total Overhead cost assigned <u>2,388.22</u>
