Question 1

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000.
What is Crain's predetermined overhead rate? Was overhead over applied or under applied for the year? By how much?

Accepted Answer

The answer of Crain Company budgeted 35,000 direct labor hours...

Question 2

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Accepted Answer

The answer of The Cavy Company estimates that the factory...

Question 3

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year was 54,300 hours. The actual factory overhead for the year was $1,375,000.
a) Determine the total factory overhead amount applied.
b) Calculate the over- or under applied amount for the year.
c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.

Accepted Answer

The answer of The Winston Company estimates that the factory...

Question 4

Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished goods inventory was 5,000 units valued at $405,000. Assuming a FIFO cost flow, determine the cost of goods sold for 20,000 units.

Accepted Answer

The answer of Cavy Company completed 26,000 units during the...

Question 5

The Jase Company allocates overhead based on a predetermined overhead rate of $9.00 per direct labor hour. Job J904 required 8 tons of direct material at a cost of $600 per ton and took employees who earn $21 per hour a total of 80 hours to complete. What is the total cost of Job J904?

Accepted Answer

The answer of The Jase Company allocates overhead based on...

Question 6

Technics Inc., a manufacturing company, utilizes job order costing. Each division establishes its own estimates regarding overhead, which are as follows:  Required:
If Division A allocates overhead on the basis of machine hours, and Division B allocates overhead as a percentage of direct labor costs, what would the predetermined overhead rate be for each division?

Accepted Answer

The answer of Technics Inc., a manufacturing company, utilizes job...

Question 7

Record the journal entries for the following transactions:
1. March 10: 500 units of raw materials were purchased on account at $4.00 per unit.
2. March 15: 250 units of raw materials were requisitioned at $4.50 per unit for production, Job 872.
3. March 25: 215 units of raw materials were requisitioned at $5.00 per unit for production, Job 879.

Accepted Answer

The answer of Record the journal entries for the following...

Question 8

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. Prepare the journal entry to apply factory overhead.

Accepted Answer

The answer of The Cavy Company estimates that the factory...

Question 9

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has determined that the basis for applying factory overhead will be machine hours, which is estimated to be 40,000 hours. There are 4,780 machine hours for all of the jobs in the month of April. What is the amount that will be applied to all of the jobs for the month of April?

Accepted Answer

The answer of The Cavy Company estimates that the factory...

Question 10

During April, Cavy Company incurred factory overhead as follows: $$\begin{array} { | l | l | } 
\hline \text { Indirect materials } & \$ 11,000 \
\hline \text { Factory supervisi on labor } & 4,000 \
\hline \text { Utilities } & 500 \
\hline \text { Depreciation fact ory) } & 700 \
\hline \text { Small tools } & 300 \
\hline \text { Equipment rental } & 750 \
\hline
\end{array}$$ Record the entry for factory overhead incurred during April.

Accepted Answer

The answer of During April, Cavy Company incurred factory overhead...

Question 11

At the end of April, Cavy Company had completed Jobs 766 and 765. The individual job cost sheets reveal the following information: $$\begin{array} { | l | l | l | l | } 
\hline \text { Job } & \text { Direct Materials } & \text { Direct Labor } & \text { Machine Hours } \
\hline \text { Job No. } 765 & \$ 5,670 & \$ 3,500 & 27 \
\hline \text { Job No. } 766 & \$ 8,900 & \$ 4,775 & 44 \
\hline
\end{array}$$ Job 765 produced 152 units, and Job 766 consisted of 250 units.
Assuming that the predetermined overhead rate is applied by using machine hours at a rate of $200 per hour, determine the a) balance on the job cost sheets for each job, and b) the cost per unit at the end of April.

Accepted Answer

The answer of At the end of April, Cavy Company...

Question 12

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. If the actual factory overhead totaled $141,800, determine the over- or under applied amount for the month.

Accepted Answer

The answer of The Cavy Company estimates that the factory...

Question 13

The Cavy Company accumulated 560 hours of direct labor on Job 345 and 800 hours on Job 777. The direct labor was incurred at a rate of $20 per direct labor hour for Job 345 and $21 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production.

Accepted Answer

The answer of The Cavy Company accumulated 560 hours of...

Question 14

Define and discuss the two main types of cost accounting systems for manufacturing operations. What are their similarities and differences?

Accepted Answer

The answer of Define and discuss the two main types...

Question 15

Cranston Company estimates the following overhead costs for the coming year: $$\begin{array} { l c } 
\text { Equipment depreciation } & \$ 160,000 \
\text { Equipment maintenance } & 60,000 \
\text { Supervisory salaries } & 40,000 \
\text { Factory rent } & \underline { 100,000 } \
\text { Total } & \$ 360,000 \
\hline
\end{array}$$ Cranston is also budgeting $600,000 in direct labor costs and 15,000 machine hours for the coming year.
Required: 
a. Calculate the predetermined overhead rate using direct labor costs as the allocation base.
b. Calculate the predetermined overhead rate using machine hours as the allocation base.

Accepted Answer

The answer of Cranston Company estimates the following overhead costs...

Question 16

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year was $1,348,800.
a) Determine the total factory overhead amount applied.
b) Calculate the over- or under applied amount for the year.
c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold.

Accepted Answer

The answer of The Winston Company estimates that the factory...

Question 17

During August, the receipts and distributions of Material No. B4G9 are as follows:  a) Determine the cost of each of the three issues under a perpetual system, using the first-in, first-out method.
b) Present the journal entry to record the issuance of the materials for the month, assuming that the cost of issuances is determined by the first-in, first-out method.

Accepted Answer

The answer of During August, the receipts and distributions of...

Question 18

National Survey Company uses a job order cost system.
a) Indicate the source of the data for debiting Work in Process for each of the following:
1) Direct materials requisitioned
2) Direct labor used
b) Indicate the source of the data for crediting Work in Process for jobs completed.
c) Present a list of the three controlling accounts used in the general ledger to record the inventories and, in each case, indicate the related subsidiary ledger.

Accepted Answer

The answer of National Survey Company uses a job order...

Question 19

Cavy Company estimates that total factory overhead costs will be $660,000 for the year. Direct labor hours are estimated to be 100,000.
Determine a) the predetermined factory overhead rate; b) the amount of factory overhead applied to Job 345 if the amount of direct labor hours is 560 and Job 777 if the amount of direct labor hours is 800; and c) prepare the journal entry to apply factory overhead for April according to the predetermined overhead rate.

Accepted Answer

The answer of Cavy Company estimates that total factory overhead...

Question 20

Flagler Company allocates overhead based on machine hours. It estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead.
Required:
a) Calculate the overhead application rate for the year.
b) What is the amount of applied overhead for the year?
c) What is the amount of under or over applied overhead for the year? Indicate whether it is over or under applied.

Accepted Answer

The answer of Flagler Company allocates overhead based on machine...

Quiz 17: Job Order Costing

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000. What is Crain's predetermined overhead rate? Was overhead over applied or under applied for the year? By how much?

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished goods inventory was 5,000 units valued at $405,000. Assuming a FIFO cost flow, determine the cost of goods sold for 20,000 units.

The Jase Company allocates overhead based on a predetermined overhead rate of $9.00 per direct labor hour. Job J904 required 8 tons of direct material at a cost of $600 per ton and took employees who earn $21 per hour a total of 80 hours to complete. What is the total cost of Job J904?

The Cavy Company accumulated 560 hours of direct labor on Job 345 and 800 hours on Job 777. The direct labor was incurred at a rate of $20 per direct labor hour for Job 345 and $21 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production.

Define and discuss the two main types of cost accounting systems for manufacturing operations. What are their similarities and differences?