1)The manangement of Sharrar Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 45,000 machine-hours. In addition, capacity is 52,000 machine-hours and the actual activity for the year is 47,100 machine-hours. All of the manufacturing overhead is fixed and is $1,029,600 per year. For simplicity, its assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity and the actual amount of manufacturing overhead for the year.
A)Determine the underapplied or overapplied overhead for the year if the pretermined overhead rate is based on the estimated amount of the allocation base.
b) Determine the underapplied or overapplied overhead for the year if the predetermined overhead rate is based on the amount of the allocation base capacity.
2)Fryer Corporation uses the weighted-average method in its process costing system. this month, the beginning inventory in the first processing department consisted of 700 units. The cost and percentage completion of these units in the beginning inventory were:
COST Percentage Complete
material Costs $12,600 75%
Conversion Costs $8,900 60%
A total of 7,300 units were started and 6,200 units were transferred to the second processing department during the month. the following costs were incurred in the first processing department during the month:
COST
Material Cost $132,200
Conversion Costs $117,500
The ending inventory was 80% complete with the respect to materials and 45% complete with respect to conversion costs.
NOTE: To reduce rounding error, carry out all computations to at least 3 decimal places.
The total cost transferred from the first processing department to the next processing department during the month is closest to what amount?
3) The following information is available on Company A:
Sales..........................................$900,000
Net Operating Income....................$36,000
Stockholders Equity.......................$100,000
Average Operating Assets...............$180,000
Minimum Required Rate of Return......15%
What is Company A's residula income amount?
A)Determine the underapplied or overapplied overhead for the year if the pretermined overhead rate is based on the estimated amount of the allocation base.
b) Determine the underapplied or overapplied overhead for the year if the predetermined overhead rate is based on the amount of the allocation base capacity.
2)Fryer Corporation uses the weighted-average method in its process costing system. this month, the beginning inventory in the first processing department consisted of 700 units. The cost and percentage completion of these units in the beginning inventory were:
COST Percentage Complete
material Costs $12,600 75%
Conversion Costs $8,900 60%
A total of 7,300 units were started and 6,200 units were transferred to the second processing department during the month. the following costs were incurred in the first processing department during the month:
COST
Material Cost $132,200
Conversion Costs $117,500
The ending inventory was 80% complete with the respect to materials and 45% complete with respect to conversion costs.
NOTE: To reduce rounding error, carry out all computations to at least 3 decimal places.
The total cost transferred from the first processing department to the next processing department during the month is closest to what amount?
3) The following information is available on Company A:
Sales..........................................$900,000
Net Operating Income....................$36,000
Stockholders Equity.......................$100,000
Average Operating Assets...............$180,000
Minimum Required Rate of Return......15%
What is Company A's residula income amount?
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