(Predetermined Overhead Rate) For 2013, Omaha Mechanical has a monthly overhead cost formula of $42,900 + $6 per direct labor hour. The firm’s 2013 expected annual capacity is $78,000 direct labor hours, to be incurred evenly each month. Making one unit of the company product requires 1.5 direct labor hours.
a. Determine the total overhead to be applied per unit of product in 2013.
b. Prepare journal entries to record the application of overhead to Work in process inventory and the incurrence of $128,550 of actual overhead in January 2013, when 6,390 direct labor hours were worked.
c. Given the actual direct labor hours in (b), how many units would you have expected to be produced in January.
(Under applied or over applied overhead) At the end of 2013, Jackson Tank Company’s account showed a $66,000 credit balance in manufacturing overhead control. In addition, the company had the following account balances:
Work in process inventory $384,000
Finished Goods Inventory $96,000
Cost of good sold $720,000
a. Prepare the necessary journal entry to close the overhead account if the balance is considered immaterial.
b. Prepare the necessary journal entry to close the overhead account if the balance is considered material.
c. Which method do you believe in more appropriate for the company, and why?
(Underapplied or overapplied overhead) At the end of 2013, Dubs wind generator co. had a $40,000 debit balance in its manufacturing overhead control account. Overhead is applied to products based on direct labor cost. Relevant account balance information at year end follows:
Work in process inventory finished inventory cost of goods sold
Direct material $20,000 $80,000 $120,000
Direct labor $10,000 $40,000 50.000
Factory overhead 20,000 80,000 100,000
Total 50,000 200,000 270,000
a. What predetermined OH rate was used during the year?
b. Provide arguments to be used for deciding whether to prorate the balance in the overhead account at the year end
c. Prorate the overhead account balance based on te relative balances of the appropriate accounts
d. Identiy some possible reasons that the company had a debit balance in the overhead account at the end of the year.
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a. Determine the total overhead to be applied per unit of product in 2013.
b. Prepare journal entries to record the application of overhead to Work in process inventory and the incurrence of $128,550 of actual overhead in January 2013, when 6,390 direct labor hours were worked.
c. Given the actual direct labor hours in (b), how many units would you have expected to be produced in January.
(Under applied or over applied overhead) At the end of 2013, Jackson Tank Company’s account showed a $66,000 credit balance in manufacturing overhead control. In addition, the company had the following account balances:
Work in process inventory $384,000
Finished Goods Inventory $96,000
Cost of good sold $720,000
a. Prepare the necessary journal entry to close the overhead account if the balance is considered immaterial.
b. Prepare the necessary journal entry to close the overhead account if the balance is considered material.
c. Which method do you believe in more appropriate for the company, and why?
(Underapplied or overapplied overhead) At the end of 2013, Dubs wind generator co. had a $40,000 debit balance in its manufacturing overhead control account. Overhead is applied to products based on direct labor cost. Relevant account balance information at year end follows:
Work in process inventory finished inventory cost of goods sold
Direct material $20,000 $80,000 $120,000
Direct labor $10,000 $40,000 50.000
Factory overhead 20,000 80,000 100,000
Total 50,000 200,000 270,000
a. What predetermined OH rate was used during the year?
b. Provide arguments to be used for deciding whether to prorate the balance in the overhead account at the year end
c. Prorate the overhead account balance based on te relative balances of the appropriate accounts
d. Identiy some possible reasons that the company had a debit balance in the overhead account at the end of the year.
AFTER PAYMENT ENTER PASSWORD : "shiv" TO UNLOCK THE SOLUTION
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