Exercises Chapter 3
Exercises Chapter 3
allocation base for allocating manufacturing overhead. The following information is available for the
most recent year:
Part b
Estimated manufacturing overhead costs divided by $420,000
Estimated direct labor hours $200,000
Predetermined manufacturing overhead rate based on direct labor
hours $2.10
Part c
Estimated manufacturing overhead costs divided by $420,000
Estimated direct labor cost $560,000
Predetermined manufacturing overhead rate based on direct labor cost 75%
Part d
Estimated manufacturing overhead costs divided by $420,000
Estimated direct labor hours $200,000
Predetermined manufacturing overhead rate based on direct labor
hours $2.10
Calculate:
a. Allocated manufacturing overhead costs for year
b. Actual number of direct labor hours worked in year
Answer:
Part a
Actual manufacturing overhead costs for year $32,500
Overallocated manufacturing overhead costs for year $2,500
Allocated manufacturing overhead costs for year $35,000
Part b
Actual manufacturing overhead costs for year $32,500
Overallocated manufacturing overhead costs for year $2,500
Allocated manufacturing overhead costs for year $35,000
Part 1b
Actual manufacturing overhead costs $35,400
Underallocated manufacturing overhead costs $(3,000)
Allocated manufacturing overhead costs $32,400
Part 2a
Actual manufacturing overhead costs $24,300
Overallocated manufacturing overhead costs $1,200
Allocated manufacturing overhead costs $25,500
Part 2b
Actual manufacturing overhead costs $24,300
Overallocated manufacturing overhead costs $1,200
Allocated manufacturing overhead costs $25,500
Sanding Finishing
Estimated amounts Dept. Dept.
Direct labor cost $250,000 $500,000
Direct labor hours 32,000 50,000
Manufacturing overhead costs $400,000 $250,000
Sanding Finishing
Actual amounts Dept. Dept.
Direct materials requisitioned $90,000 $45,000
Direct labor cost $50,000 $40,000
Direct labor hours 7,000 5,000
a. Compute the predetermined manufacturing overhead rate for the Sanding Department.
b. Compute the predetermined manufacturing overhead rate for the Finishing Department.
c. What is the total manufacturing overhead cost for Job. No. 140?
d. If Job No. 140 consists of 500 units of product, what is the average unit cost of this job?
Answer:
Diff: 2
136) Stars and Stripes Corporation uses job costing. The following is selected financial data from the
company for the most recent year.
Part b
Manufacturing overhead allocated $80,000
MOH % of direct labor cost ×125%
Direct labor cost $64,000
Part c
Ending finished goods inventory $54,000
Cost of goods sold for year $75,100
Cost of goods manufactured during year $ (125,000)
Beginning finished goods inventory $4,100
Part d
Manufacturing overhead allocated $80,000
Amount of underallocated manufacturing overhead $3,200
Actual manufacturing overhead $83,200
248) The following information was gathered for the Falsetto Corporation for the most recent year.
Manufacturing overhead is allocated using direct labor hours.
Compute:
a) Predetermined manufacturing overhead rate
b) Manufacturing overhead allocated for the year
c) Amount of over/underallocated overhead at the end of the year
Answer:
SOLUTION - Part a
Estimated manufacturing overhead costs divided by $ 1,275,000
Estimated direct labor hours 75,000
Predetermined manufacturing overhead rate per DL hour $ 17.00
SOLUTION - Part b
Estimated manufacturing overhead costs divided by $ 1,275,000
Estimated direct labor hours 75,000
Predetermined manufacturing overhead rate per DL hour $ 17.00
SOLUTION - Part c
Estimated manufacturing overhead costs divided by $ 1,275,000
Estimated direct labor hours 75,000
Predetermined manufacturing overhead rate per DL hour $ 17.00
In April, two jobs were completed with total costs of $110,000 and $95,000, respectively. In April, the
two jobs were sold on account for $187,000 and $124,000, respectively.
+19+130+135+175-110-95
a. Compute the balance in work in process inventory on April 30.
b. Record the journal entry for direct materials used in April.
c. Record the journal entry to record labor costs for April. WIP + MOH +WP
d. Record the journal entry for allocated manufacturing overhead for April. WIP +MOH
e. Record the entry to move the completed jobs into finished goods inventory in April. FGI + WIP
f. Record the entry to sell the two completed jobs on account in April. AR S , COGS + FGI
Answer: