All Related Questions of Predetermined Overhead Rate

Q: Presented below are the monthly factory overhead cost budget (at normal

Presented below are the monthly factory overhead cost budget (at normal capacity of 5,000 units or 20,000 direct labor hours) and the production and cost data for a month. The predetermined overhead r...

Q: Hokuriku-Seika Co., Ltd., of Yokohama, Japan,

Hokuriku-Seika Co., Ltd., of Yokohama, Japan, is a subcontractor to local manufacturing companies. The company specializes in precision metal cutting using focused high-pressure water jets and high-en...

Q: Starfax, Inc., manufactures a small part that is widely used

Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Operating results for the first three years of activity were as follows (absorption...

Q: Harrison Company makes two products and uses a traditional costing system in

Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for...

Q: Java Source, Inc. (JSI), is a processor and

Java Source, Inc. (JSI), is a processor and distributor of a variety of blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. JSI offe...

Q: Privack Corporation has a standard cost system in which it applies overhead

Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: Wesco Incorporated’s only product is a combination fertilizer/weedkiller called GrowNWeed

Wesco Incorporated’s only product is a combination fertilizer/weedkiller called GrowNWeed. GrowNWeed is sold nationwide to retail nurseries and garden stores. Zwinger Nursery plans t...

Q: Primara Corporation has a standard cost system in which it applies overhead

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: Operating at a normal level of 30,000 direct labor-

Operating at a normal level of 30,000 direct labor-hours, Lasser Company produces 10,000 units of product each period. The direct labor wage rate is $12 per hour. Two and one-half yards of direct mate...

Q: Norwall Company’s variable manufacturing overhead should be $3.00 per

Norwall Company’s variable manufacturing overhead should be $3.00 per standard machine-hour and its fixed manufacturing overhead should be $300,000 per period. The following informat...

Q: Lane Company manufactures a single product that requires a great deal of

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $2...

Q: The standard cost card for the single product manufactured by Cutter,

The standard cost card for the single product manufactured by Cutter, Inc., is given below: Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the yea...

Q: In December 2012, Shire Computer’s management establishes the year 2013 predetermined

In December 2012, Shire Computer’s management establishes the year 2013 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes est...

Q: At the beginning of a period a company predicts total direct materials

At the beginning of a period a company predicts total direct materials costs of $900,000 and total overhead costs of $1,170,000. If the company uses direct materials costs as its activity base to allo...

Q: Why must a company prepare a predetermined overhead rate when using job

Why must a company prepare a predetermined overhead rate when using job order cost accounting?

Q: As of the end of June, the job cost sheets at

As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costsaccumulated on three custom jobs. Job 102 was started in production in May and the following costs we...

Q: The following information is available for Lock-Safe Company, which

The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system. Compute the following amounts for the month...

Q: In December 2012, Infovision established its predetermined overhead rate for movies

In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $1,680,000, and direct labor cost...

Q: In December 2012, Cardozo Company established its predetermined overhead rate for

In December 2012, Cardozo Company established its predetermined overhead rate for jobs produced during year 2013 by using the following cost predictions: overhead costs, $750,000, and direct labor cos...

Q: Sunrise Company applies factory overhead based on direct labor costs. The

Sunrise Company applies factory overhead based on direct labor costs. The company incurred thefollowing costs during 2013: direct materials costs, $650,000; direct labor costs, $3,000,000; and factor...

Q: Deschamps Company’s ending Goods in Process Inventory account consists of 5,

Deschamps Company’s ending Goods in Process Inventory account consists of 5,000 units of partially completed product, and its Finished Goods Inventory account consists of 12,000 units of product. The...

Q: King Company produces variations of its product, a megatron, in

King Company produces variations of its product, a megatron, in response to custom orders from its customers. On June 1, the company had no inventories of goods in process or finished goods but held t...

Q: The computer workstation furniture manufacturing that Adria Lopez started in January is

The computer workstation furniture manufacturing that Adria Lopez started in January is progressing well. As of the end of June, Success Systems’ job cost sheets show the following t...

Q: Prescott Company’s predetermined overhead rate is 200% of direct labor.

Prescott Company’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during September 2013 follows. a. Purchased raw materials on credit, $125,000...

Q: In December 2012, Pavelka Company’s manager estimated next year’s total direct

In December 2012, Pavelka Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $15 per hour. The manage...

Q: In December 2012, Yerbury Company’s manager estimated next year’s total direct

In December 2012, Yerbury Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $25 per hour. The manage...

Q: Sager Company manufactures variations of its product, a technopress, in

Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of goods in process or finished goods but...

Q: Swisher Company’s computer system generated the following trial balance on December 31

Swisher Company’s computer system generated the following trial balance on December 31, 2013. The company’s manager knows that the trial balance is wrong because it...

Q: Tavella Co.’s August 31 inventory of raw materials is $

Tavella Co.’s August 31 inventory of raw materials is $150,000. Raw materials purchases in September are $400,000, and factory payroll cost in September is $232,000. Overhead costs i...

Q: Ciolino Co.’s March 31 inventory of raw materials is $

Ciolino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in...

Q: Widmer Watercraft’s predetermined overhead rate for year 2013 is 200% of

Widmer Watercraft’s predetermined overhead rate for year 2013 is 200% of direct labor. Information on the company’s production activities during May 2013 follows. a. Purchased raw materials on credit,...

Q: Laffer Lumber produces bagged bark for use in landscaping. Production involves

Laffer Lumber produces bagged bark for use in landscaping. Production involves packaging bark chips in plastic bags in a bagging department. The following information describes production operations f...

Q: Farina Bay’s computer system generated the following trial balance on December 31

Farina Bay’s computer system generated the following trial balance on December 31, 2013. The company’s manager knows something is wrong with the trial balance becau...

Q: Trico Company set the following standard unit costs for its single product

Trico Company set the following standard unit costs for its single product. Direct materials (30 Ibs. @ $4 per Ib.) . . . . . . . . . . . . . . . . . $120.00 Direct labor (5 hrs. @ $14 per hr.) . . ....

Q: Antuan Company set the following standard costs for one unit of its

Antuan Company set the following standard costs for one unit of its product. Direct materials (6 Ibs. @ $5 per Ib.) . . . . . . . . . $ 30 Direct labor (2 hrs. @ $17 per hr.). . . . . . . . . . . . ....

Q: Kegler Company has set the following standard costs per unit for the

Kegler Company has set the following standard costs per unit for the product it manufactures. Direct materials (15 Ibs. @ $4 per Ib.). . . . . . . . . . . $ 60.00 Direct labor (3 hrs. @ $15 per hr.)...

Q: Kryll Company set the following standard unit costs for its single product

Kryll Company set the following standard unit costs for its single product. Direct materials (25 Ibs. @ $4 per Ib.) . . . . . . . . . . . . . . . . . . . $100.00 Direct labor (6 hrs. @ $8 per hr.) ....

Q: Refer to information in Problem 8-1B. In

Refer to information in Problem 8-1B. In Problem 8-1B Kryll Company set the following standard unit costs for its single product. Direct materials (25 Ibs. @ $4 per Ib.) . . . . . . . . . . . . . ....

Q: Suncoast Company set the following standard costs for one unit of its

Suncoast Company set the following standard costs for one unit of its product. Direct materials (4.5 lb. @ $6 per kg.) . . . . . . . . . . $27 Direct labor (1.5 hrs. @ $12 per hr.) . . . . . . . . ....

Q: Guadelupe Company has set the following standard costs per unit for the

Guadelupe Company has set the following standard costs per unit for the product it manufactures. Direct materials (10 lbs. @ $3.00 per lb.) . . . . . . . . . . . $30.00 Direct labor (4 hr. @ $6 per h...

Q: Tiger Furnishings produces two models of cabinets for home theater components,

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Required Compute the predetermined overhead...

Q: Refer to the data in Exercise 6-34. Compute the

Refer to the data in Exercise 6-34. Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. In Exercise 6-34 Tiger Furnishings prod...

Q: Refer to the data in Exercise 6-34. Compute the

Refer to the data in Exercise 6-34. Compute the predetermined overhead rate assuming that Tiger Furnishings uses machine-hours to allocate overhead costs. In Exercise 6-34 Tiger Furnishings produces...

Q: Describe the predetermined overhead rate. What is the role of the

Describe the predetermined overhead rate. What is the role of the predetermined overhead rate in product costing?

Q: Kansas Company uses a job costing accounting system for its production costs

Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The compa...

Q: UCD Company uses a job costing accounting system for its production costs

UCD Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labor-hours is used to apply overhead to individual jobs. An estimate of overhe...

Q: Lys Wheels manufactures high-performance mountain bikes. Lys uses a

Lys Wheels manufactures high-performance mountain bikes. Lys uses a predetermined overhead rate based on direct labor hours to absorb overhead to mountain bikes. For the last fiscal year, the firm had...

Q: Taylor designs and manufactures high-performance bicycle chains for professional racers

Taylor designs and manufactures high-performance bicycle chains for professional racers and serious amateurs. Two new titanium chain sets, the Challenger and the Tour, sell for €110 a...

Q: Hurst Mats manufactures custom replacement floor mats for automobiles. The floor

Hurst Mats manufactures custom replacement floor mats for automobiles. The floor mats are made of spun nylon on highly automated, expensive machinery. Hurst manufactures two mat styles: Plush and Delu...

Q: Jacklin Stampings allocates overhead to products based on machine hours. It

Jacklin Stampings allocates overhead to products based on machine hours. It uses a flexible overhead budget to calculate a predetermined overhead rate at the beginning of the year. This rate is used d...

Q: College Supply Company (CSC) makes three types of drinking glasses

College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor-hours. A group of company em...

Q: The controller for Tender Bird Poultry, Inc. estimates that the

The controller for Tender Bird Poultry, Inc. estimates that the company’s fixed overhead is $150,000 per year. She also has determined that the variable overhead is approximately $.15 per chicken rais...

Q: Explain the benefits of using a predetermined overhead rate instead of an

Explain the benefits of using a predetermined overhead rate instead of an actual overhead rate.

Q: Dewitt Educational Products started and finished job number RM67 during June.

Dewitt Educational Products started and finished job number RM67 during June. The job required $5,100 of direct material and 40 hours of direct labor at $18 per hour. The predetermined overhead rate i...

Q: Crunchem Cereal Company incurred the following actual costs during 20x4.

Crunchem Cereal Company incurred the following actual costs during 20x4. Direct material used ................................................... $412,500 Direct labor ...................................

Q: The following data pertain to the Aquarius Hotel Supply Company for the

The following data pertain to the Aquarius Hotel Supply Company for the year just ended. Budgeted sales revenue ................................................................ $945,000 Budgeted manu...

Q: Refer to the data for the preceding exercise for Aquarius Hotel Supply

Refer to the data for the preceding exercise for Aquarius Hotel Supply Company. Prepare a journal entry to add to work-in-process inventory the total manufacturing overhead cost for the year, assuming...

Q: Biloxi Billiards Company uses normal costing, and manufacturing overhead is applied

Biloxi Billiards Company uses normal costing, and manufacturing overhead is applied to work in process on the basis of machine hours. On January 1 of the current year there were no balances in work-in...

Q: Contemporary Trends is an interior decorating firm in Munich. The following

Contemporary Trends is an interior decorating firm in Munich. The following costs were incurred in the firm’s contract to redecorate the mayor’s offices. Direct material used ...........................

Q: ColorTech Corporation manufactures two different color printers for the business market.

ColorTech Corporation manufactures two different color printers for the business market. Cost estimates for the two models for the current year are as follows Each model of printer requires 20 hours...

Q: Vermont Clock Works manufactures fine, handcrafted clocks. The firm uses

Vermont Clock Works manufactures fine, handcrafted clocks. The firm uses a job-order costing system, and manufacturing overhead is applied on the basis of direct-labor hours. Estimated manufacturing o...

Q: Seaway, Inc. manufactures outboard motors and an assortment of other

Seaway, Inc. manufactures outboard motors and an assortment of other marine equipment. The company uses a job-order costing system. Normal costing is used, and manufacturing overhead is applied on the...

Q: Tiana Shar, the controller for Caesar Glassware Company, is in

Tiana Shar, the controller for Caesar Glassware Company, is in the process of analyzing the overhead costs for the month of November. She has gathered the following data for the month. Labor Direc...

Q: Rochester Heating Systems, Inc. calculates its predetermined overhead rate on

Rochester Heating Systems, Inc. calculates its predetermined overhead rate on a quarterly basis. The following estimates were made for the current year. The firm’s main product, par...

Q: Conundrum, Inc. manufactures puzzles. Due to a fire in

Conundrum, Inc. manufactures puzzles. Due to a fire in the administrative offices, the accounting records for September of the current year were partially destroyed. You have been able to piece togeth...

Q: Madison Electric Pump Corporation manufactures electric pumps for commercial use. The

Madison Electric Pump Corporation manufactures electric pumps for commercial use. The company produces three models, designated as regular, advanced, and deluxe. The company uses a job-order cost acco...

Q: Kitchen King’s Toledo plant manufactures three product lines, all multi-

Kitchen King’s Toledo plant manufactures three product lines, all multi-burner, ceramic cook tops. The plant’s three product models are the Regular (REG), the Advan...

Q: Rapid City Technology, Inc. manufactures chemicals used in agricultural pest

Rapid City Technology, Inc. manufactures chemicals used in agricultural pest control. The controller has established the following activity cost pools and cost drivers. An order for 1,000 boxes of a...

Q: Gourmet Specialty Coffee Company (GSCC) is a distributor and processor

Gourmet Specialty Coffee Company (GSCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resa...

Q: Gigabyte, Inc., manufactures three products for the computer industry:

Gigabyte, Inc., manufactures three products for the computer industry: Gismos (product G): annual sales, 8,000 units Thingamajigs (product T): annual sales, 15,000 units Whatchamacallits (product W):...

Q: Opticom, Inc. a manufacturer of fiber optic communications equipment,

Opticom, Inc. a manufacturer of fiber optic communications equipment, uses a j ob-order costing system. Since the production process is heavily automated, manufacturing overhead is applied on the basi...

Q: Maverick Wings, Inc. manufactures airplanes for use in stunt shows

Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick’s factory is highly automated, using the latest in robotic technology. To keep costs low, the company emp...

Q: Thoni Manufacturing has gathered information from materials requisition sheets and labor time

Thoni Manufacturing has gathered information from materials requisition sheets and labor time sheets for several jobs worked on during the last month and needs to calculate the job costs. Required: a...

Q: The following events occurred over the course of a year at Bagby

The following events occurred over the course of a year at Bagby Corp., which uses a job order costing system: 1. Direct materials purchases totaled $460,000. 2. $230,000 of indirect materials were us...

Q: Northcoast Manufacturing Company, a small manufacturer of appliance parts, has

Northcoast Manufacturing Company, a small manufacturer of appliance parts, has just completed its first year of operations. The company’s controller, Vic Trainor, has been reviewing the results for th...

Q: Paladin Parabolics Company produces high-quality microscopes for education and health

Paladin Parabolics Company produces high-quality microscopes for education and health care uses. The company uses a job order costing system. Because the microscopes’ optics require...

Q: Beltran Corporation produces wooden and aluminum baseball bats. In preparing the

Beltran Corporation produces wooden and aluminum baseball bats. In preparing the current budget, Beltran’s management estimated a total of $500,000 in manufacturing overhead costs and 10,000 machine h...

Q: Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia

Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for internal reporting purposes; however, the company is considering using vari...

Q: Jay Rexford, president of Photo Artistry Company, was just concluding

Jay Rexford, president of Photo Artistry Company, was just concluding a budget meeting with his senior staff. It was November of 20x4, and the group was discussing preparation of the firmâ€...

Q: Edgeworth Box Corporation manufactures two types of cardboard boxes used in shipping

Edgeworth Box Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the foll...

Q: Travelcraft, Inc., manufactures a complete line of fiberglass suitcases and

Travelcraft, Inc., manufactures a complete line of fiberglass suitcases and attaché cases. The firm has three manufacturing departments: Molding, Component, and Assembly. There are also t...

Q: YSL Marketing Research is a small firm located in Seattle, Washington

YSL Marketing Research is a small firm located in Seattle, Washington. On behalf of its clients, the firm conducts focus group meetings, telephone and mail opinion surveys, and evaluations of marketin...

Q: At the start of the year, Vencor Company estimated manufacturing overhead

At the start of the year, Vencor Company estimated manufacturing overhead to be $2,000,000. Eighty percent of the overhead is fixed and relates to depreciation of equipment. The remaining 20 percent i...

Q: Franklin Computer Repair treats each repair order as a job. Overhead

Franklin Computer Repair treats each repair order as a job. Overhead is allocated based on the cost of technician time. At the start of the year, annual technician wages were estimated to be $800,000,...

Q: Milton Company is a steel fabricator, and job 325 consists of

Milton Company is a steel fabricator, and job 325 consists of producing 500 steel supports for Wendell Construction Company. Overhead is applied on the basis of direct labor hours, using a predetermin...

Q: At Precision Custom Molds, manufacturing overhead was estimated to be $

At Precision Custom Molds, manufacturing overhead was estimated to be $20,000,000 at the start of the year and direct labor hours were estimated to be 200,000. Overhead is applied to jobs using a pred...

Q: Rosemont Music is a musical instrument repair facility located in Akron,

Rosemont Music is a musical instrument repair facility located in Akron, Ohio. The repair shop uses a job-order costing system and applies overhead costs to repair jobs on the basis of repair technici...

Q: Southwest Community Hospital uses a job-order costing system to track

Southwest Community Hospital uses a job-order costing system to track charges for each patient. The following charges relate to Candice O’Dea, who had laparoscopic knee surgery: Pharmacy…………………………………...

Q: The following cost data relate to the office overhead costs of the

The following cost data relate to the office overhead costs of the Charles Wright Tax Preparation Company during the just-completed year: Overhead costs incurred: Office rent…………………………………………$ 25,000...

Q: As an assistant cost accountant for Mississippi Industries, you have been

As an assistant cost accountant for Mississippi Industries, you have been assigned to re­ view the activity base for the predetermined factory overhead rate. The president, Tony Favre, ha...

Q: Bergan Company estimates that total factory overhead costs will be $620

Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,000. For Bergan Company, (a) determine the predetermined factory ov...

Q: Rothchild Company estimates that total factory overhead costs will be $810

Rothchild Company estimates that total factory overhead costs will be $810,000 for the year. Direct labor hours are estimated to be 90,000. For Rothchild Company, (a) determine the predetermined fact...

Q: Binder Manufacturing produces small electric motors used by appliance manufacturers. In

Binder Manufacturing produces small electric motors used by appliance manufacturers. In the past year, the company has experienced severe excess capacity due to competition from a foreign company that...

Q: Brennen produces a mint syrup used by gum and candy companies.

Brennen produces a mint syrup used by gum and candy companies. Recently, the company has had excess capacity due to a foreign supplier entering its market. Brennen is currently bidding on a potential...

Q: TriTech Company has been allocating overhead to individual product lines based on

TriTech Company has been allocating overhead to individual product lines based on each line’s relative shares of direct labor hours. For the upcoming year, the company estimated that...

Q: At the beginning of the year, Horvath Company estimated the following

At the beginning of the year, Horvath Company estimated the following: Overhead …………………………………… $486,400 Direct labor hours …………………………… 95,000 Horvath uses normal costing and applies overhead on the...

Q: Xania Inc. uses a normal job-order costing system.

Xania Inc. uses a normal job-order costing system. Currently, a plant wide overhead rate based on machine hours is used. Xania’s plant manager has heard that departmental overhead ra...

Q: Explain how overhead is assigned to production when a predetermined overhead rate

Explain how overhead is assigned to production when a predetermined overhead rate is used.

Q: Applied overhead is a. an important part of normal

Applied overhead is a. an important part of normal costing. b. never used in normal costing. c. an important part of actual costing. d. the predetermined overhead rate multiplied by estimated activit...

Q: At the beginning of the year, Debion Company estimated the following

At the beginning of the year, Debion Company estimated the following: Overhead ……………………………………… $522,900 Direct labor hours …………………………….. 83,000 Debion uses normal costing and applies overhead on the...

Q: The predetermined overhead rate equals a. actual overhead divided

The predetermined overhead rate equals a. actual overhead divided by actual activity level for a period. b. estimated overhead divided by estimated activity level for a period. c. actual overhead min...

Q: Golding Manufacturing, a division of Farnsworth Sporting Inc., produces two

Golding Manufacturing, a division of Farnsworth Sporting Inc., produces two different models of bows and eight models of knives. The bow-manufacturing process involves the production of two major suba...

Q: Wilson Company has a predetermined overhead rate of $5 per direct

Wilson Company has a predetermined overhead rate of $5 per direct labor hour. The job order cost sheet for Job 145 shows 500 direct labor hours costing $10,000 and materials requisitions totaling $17,...

Q: At the beginning of the year, Ilberg Company estimated the following

At the beginning of the year, Ilberg Company estimated the following costs: Overhead …………………………………………. $416,000 Direct labor cost …………………………………. 520,000 Ilberg uses normal costing and applies overhe...

Q: Bobcat Inc.’s total predetermined overhead rate is $50 per

Bobcat Inc.’s total predetermined overhead rate is $50 per hour based on a monthly capacity of 58,000 machine hours. Overhead is 30 percent variable and 70 percent fixed. During September 2010, Bobcat...

Q: Discuss the reasons a company would use a predetermined overhead rate rather

Discuss the reasons a company would use a predetermined overhead rate rather than actual overhead to determine cost of products or services.

Q: Treffle Molding Company manufactures two products: large jar covers and small

Treffle Molding Company manufactures two products: large jar covers and small bottle caps. Large jar covers require special handling. Each cover must be individually sanded on a special machine to rem...

Q: Balfore Office makes metal five-drawer desks and, occasionally,

Balfore Office makes metal five-drawer desks and, occasionally, takes custom orders. The company’s overhead costs for a month in which no custom desks are produced are as follows: Purchasing Departmen...

Q: West Virginia Concepts provides a wide range of engineering and architectural consulting

West Virginia Concepts provides a wide range of engineering and architectural consulting services through its three offices in Charleston, Morgantown, and Martinsburg. The company allocates resources...

Q: Mystic Inc. uses a job order costing system and applies overhead

Mystic Inc. uses a job order costing system and applies overhead to jobs at a predetermined rate of $4.25 per direct labor dollar. During April 2010, the company spent $29,600 on direct material and $...

Q: Rio Valde Co. uses a normal cost, job order costing

Rio Valde Co. uses a normal cost, job order costing system. In the Mixing Department, overhead is applied using machine hours; in Paving, overhead is applied using direct labor hours. In December 2009...

Q: San Angelo Corp. uses a job order costing system for client

San Angelo Corp. uses a job order costing system for client contracts related to custom-manufactured pulley systems. Elmore Mechanical recently ordered 20,000 pulleys, and the job was assigned #BA468....

Q: Leeds Architectural Consultants began operations on January 2. The following activity

Leeds Architectural Consultants began operations on January 2. The following activity was recorded in the company’s Work in Process account for the first month of operations: Leeds...

Q: The following cost data relate to the manufacturing activities of Chang Company

The following cost data relate to the manufacturing activities of Chang Company during the just completed year: Manufacturing overhead costs incurred: Indirect materials .................................

Q: Vista Landscaping uses a job-order costing system to track the

Vista Landscaping uses a job-order costing system to track the costs of its landscaping projects. The company provides garden design and installation services for its clients. The table below provides...

Q: White Company has two departments, Cutting and Finishing. The company

White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its ra...

Q: Gitano Products operates a job-order costing system and applies overhead

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). All materials a...

Q: High Desert Potteryworks makes a variety of pottery products that it sells

High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used t...

Q: Harris Fabrics computes its predetermined overhead rate annually on the basis of

Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year it estimated that its total manufacturing overhead would be $134,000 a...

Q: Luthan Company uses a predetermined overhead rate of $23.40

Luthan Company uses a predetermined overhead rate of $23.40 per direct labor-hour. This predetermined rate was based on 11,000 estimated direct labor-hours and $257,400 of estimated total manufacturin...

Q: Osborn Manufacturing uses a predetermined overhead rate of $18.20

Osborn Manufacturing uses a predetermined overhead rate of $18.20 per direct labor-hour. This predetermined rate was based on 12,000 estimated direct labor-hours and $218,400 of estimated total manufa...

Q: Siegel Corporation manufactures a product that is available in both a deluxe

Siegel Corporation manufactures a product that is available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced several years ago to...

Q: Aucton Corporation is a manufacturing company that uses activity-based costing

Aucton Corporation is a manufacturing company that uses activity-based costing for its external financial reports. The company’s activity cost pools and associated data for the comin...

Q: Ellix Company manufactures two models of ultra-high fidelity speakers,

Ellix Company manufactures two models of ultra-high fidelity speakers, the X200 model and the X99 model. Data regarding the two products follow: Additional information about the company follows: a....

Q: Kramer Corporation is a diversified manufacturer of consumer goods. The company’s

Kramer Corporation is a diversified manufacturer of consumer goods. The company’s activity based costing system has the following seven activity cost pools: Required: 1. Compute th...

Q: Harrison Company makes two products and uses a conventional costing system in

Harrison Company makes two products and uses a conventional costing system in which a single plant wide predetermined overhead rate is computed based on direct labor-hours. Data for the two products f...

Q: Terri Ronsin had recently been transferred to the Home Security Systems Division

Terri Ronsin had recently been transferred to the Home Security Systems Division of National Home Products. Shortly after taking over her new position as divisional controller, she was asked to develo...

Q: Kelvin Aerospace, Inc., manufactures parts such as rudder hinges for

Kelvin Aerospace, Inc., manufactures parts such as rudder hinges for the aerospace industry. The company uses a job-order costing system with a predetermined plantwide overhead rate based on direct la...

Q: After a dispute concerning wages, Orville Arson tossed an incendiary device

After a dispute concerning wages, Orville Arson tossed an incendiary device into the Sparkle Company’s record vault. Within moments, only a few charred fragments were readable from t...

Q: Java Source, Inc. (JSI), is a processor and

Java Source, Inc. (JSI), is a processor and distributor of a variety of blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. JSI offe...

Q: Privack Corporation has a standard cost system in which it applies overhead

Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: Primara Corporation has a standard cost system in which it applies overhead

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: Operating at a normal level of 30,000 direct labor-

Operating at a normal level of 30,000 direct labor-hours, Lasser Company produces 10,000 units of product each period. The direct labor wage rate is $12 per hour. Two and one-half yards of direct mate...

Q: Norwall Company’s variable manufacturing overhead should be $3.00 per

Norwall Company’s variable manufacturing overhead should be $3.00 per standard machine-hour and its fixed manufacturing overhead should be $300,000 per period. The following information is available f...

Q: The standard cost card for the single product manufactured by Cutter,

The standard cost card for the single product manufactured by Cutter, Inc., is given below: Standard Cost Card—per Unit Direct materials, 3 yards at $6.00 per yard ....................

Q: Lane Company manufactures a single product that requires a great deal of

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $2...

Q: Fredericksburg Vegetable is a fruit packing business. The firm buys peaches

Fredericksburg Vegetable is a fruit packing business. The firm buys peaches by the truckload in season and separates them into three categories: premium, good, and fair. Premium peaches can be sold...

Q: When is by-product/scrap cost considered in setting the

When is by-product/scrap cost considered in setting the predetermined overhead rate in a job order costing system? When is cost not considered?

Q: Renaissance Creations restores antique stained glass windows. All jobs generate some

Renaissance Creations restores antique stained glass windows. All jobs generate some breakage or improper cuts. This scrap can be sold to stained glass hobbyists. Renaissance Creations expects to incu...

Q: Star Videos, Inc., produces short musical videos for sale to

Star Videos, Inc., produces short musical videos for sale to retail outlets. The company’s balance sheet accounts as of January 1 are given below. Because the videos differ in lengt...

Q: This Excel worksheet relates to the Dickson Company example that is summarized

This Excel worksheet relates to the Dickson Company example that is summarized in Exhibit 2–5. Download the workbook containing this form from Connect, where you will also find instr...

Q: The Excel worksheet form that appears below is to be used to

The Excel worksheet form that appears below is to be used to recreate part of the example relating to Turbo Crafters that appears earlier in the chapter. Download the workbook containing this form Yo...

Q: “Blast it!” said David Wilson, president of Teledex Company

“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $2,000. It seems we&...

Q: “Blast it!” said David Wilson, president of Teledex Company

“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $2,000. It seems we&...

Q: Siegel Company manufactures a product that is available in both a deluxe

Siegel Company manufactures a product that is available in both a deluxe model and a regular model. The company has manufactured the regular model for years. The deluxe model was introduced several ye...

Q: Java Source, Inc., (JSI) buys coffee beans from

Java Source, Inc., (JSI) buys coffee beans from around the world and roasts, blends, and packages them for resale. Some of JSI’s coffees are very popular and sell in large volumes, w...

Q: Delph Company uses a job-order costing system and has two

Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year...

Q: Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis

Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 20,000 direct labor-hours would be requir...

Q: Moody Corporation uses a job-order costing system with a plantwide

Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-h...

Q: Mickley Company’s plantwide predetermined overhead rate is $14.00 per

Mickley Company’s plantwide predetermined overhead rate is $14.00 per direct labor-hour and its direct labor wage rate is $17.00 per hour. The following information pertains to Job A-500: Direct mater...

Q: : Tech Solutions is a consulting firm that uses a job-

Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm’s dir...

Q: Wixis Cabinets makes custom wooden cabinets for high-end stereo systems

Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of it...

Q: Hahn Company uses a job-order costing system. Its plantwide

Hahn Company uses a job-order costing system. Its plantwide predetermined overhead rate uses direct labor-hours as the allocation base. The company pays its direct laborers $15 per hour. During the ye...

Q: Taveras Corporation is currently operating at 50% of its available manufacturing

Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At th...

Q: Harwood Company uses a job-order costing system that applies overhead

Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company’s predetermined overhead rate of $2.40 per machine-hour...

Q: Security Pension Services helps clients to set up and administer pension plans

Security Pension Services helps clients to set up and administer pension plans that are in compliance with tax laws and regulatory requirements. The firm uses a job-order costing system in which overh...

Q: Landen Corporation uses a job-order costing system. At the

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production.......140,000 M...

Q: Wilmington Company has two manufacturing departments—Assembly and Fabrication. It

Wilmington Company has two manufacturing departments—Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is s...

Q: Platinum Tracks, Inc., is a small audio recording studio located

Platinum Tracks, Inc., is a small audio recording studio located in Los Angeles. The company handles work for advertising agencies—primarily for radio ads—and has a...

Q: McCullough Hospital uses a job-order costing system to assign costs

McCullough Hospital uses a job-order costing system to assign costs to its patients. Its direct materials include a variety of items such as pharmaceutical drugs, heart valves, artificial hips, and pa...

Q: Mason Company has two manufacturing departments—Machining and Assembly. The

Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following est...

Q: Luzadis Company makes furniture using the latest automated technology. The company

Luzadis Company makes furniture using the latest automated technology. The company uses a job order costing system and applies manufacturing overhead cost to products on the basis of machine hours. Th...

Q: Froya Fabrikker A/S of Bergen, Norway, is a

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields.The company uses a job-order costing system that applies manufactu...

Q: Supreme Videos, Inc., produces short musical videos for sale to

Supreme Videos, Inc., produces short musical videos for sale to retail outlets. The company’s balance sheet accounts as of January 1, are given below. Because the videos differ in l...

Q: : Pat Miranda, the new controller of Vault Hard Drives,

Pat Miranda, the new controller of Vault Hard Drives, Inc., has just returned from a seminar on the choice of the activity level in the predetermined overhead rate. Even though the subject did not sou...

Q: Sweeten Company had no jobs in progress at the beginning of March

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, com...

Q: Bunnell Corporation is a manufacturer that uses job-order costing.

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows: Raw materials.......................$40,000 Work in process............

Q: Rasmussen Corporation expects to incur indirect overhead costs of $80,

Rasmussen Corporation expects to incur indirect overhead costs of $80,000 per month and direct manufacturing costs of $12 per unit. The expected production activity for the first four months of 2017 i...

Q: Ware Manufacturing Company produced 2,000 units of inventory in January

Ware Manufacturing Company produced 2,000 units of inventory in January 2018. It expects to produce an additional 14,000 units during the remaining 11 months of the year. In other words, total product...

Q: Velez Corporation estimated its overhead costs would be $50,000

Velez Corporation estimated its overhead costs would be $50,000 per month except for January when it pays the $30,000 annual insurance premium on the manufacturing facility. Accordingly, the January o...

Q: Chamlee Industries Inc. manufactures recreational vehicles. Chamlee Industries uses a

Chamlee Industries Inc. manufactures recreational vehicles. Chamlee Industries uses a job order cost system. The time tickets from May jobs are summarized below. Job 5-100 ………………………………. $6,400 Job 5-1...

Q: Media Connect Inc. provides advertising services for clients across the nation

Media Connect Inc. provides advertising services for clients across the nation. Media Connect is presently working on four projects, each for a different client. Media Connect accumulates costs for ea...

Q: Phoenix Company manufactures only one product and uses a standard cost system

Phoenix Company manufactures only one product and uses a standard cost system. The company uses a plantwide predetermined overhead rate that relies on direct labor-hours as the allocation base The pre...

Q: Lasser Company plans to produce 10,000 units next period at

Lasser Company plans to produce 10,000 units next period at a denominator activity of 30,000 direct labor-hours. The direct labor wage rate is $12 per hour. The company’s standards a...

Q: Bowen Company manufactures one product, it does not maintain any beginning

Bowen Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $1,000,000 of fixed over...

Q: Norwall Company’s budgeted variable manufacturing overhead cost is $3.00

Norwall Company’s budgeted variable manufacturing overhead cost is $3.00 per machine-hour and its budgeted fixed manufacturing overhead is $300,000 per month. The following information is available fo...

Q: Hartwell Company manufactures one product, it does not maintain any beginning

Hartwell Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $1,760,000 of fixed m...

Q: Wallis Company manufactures only one product and uses a standard cost system

Wallis Company manufactures only one product and uses a standard cost system.The company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. All of t...

Q: Antuan Company set the following standard costs for one unit of its

Antuan Company set the following standard costs for one unit of its product. The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factoryâ...

Q: Trico Company set the following standard unit costs for its single product

Trico Company set the following standard unit costs for its single product. The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units p...

Q: Refer to information in Problem 23-4A. Required

Refer to information in Problem 23-4A. Required Compute these variances: (a) variable overhead spending and efficiency, (b) fixed overhead spending and volume, and (c) total overhead controllable. I...

Q: Suncoast Company set the following standard costs for one unit of its

Suncoast Company set the following standard costs for one unit of its product. The predetermined overhead rate ($16.00 per direct labor hour) is based on an expected volume of 75% of the factory&aci...

Q: Kryll Company set the following standard unit costs for its single product

Kryll Company set the following standard unit costs for its single product. The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units p...

Q: Refer to information in Problem 23-4B. Required

Refer to information in Problem 23-4B. Required Compute these variances: (a) variable overhead spending and efficiency, (b) fixed overhead spending and volume, and (c) total overhead controllable. I...

Q: Complete the following for a traditional two-stage allocation system:

Complete the following for a traditional two-stage allocation system: In the first stage, service department costs are assigned to ______ departments. In the second stage, a predetermined overhead rat...

Q: At the beginning of a year, a company predicts total direct

At the beginning of a year, a company predicts total direct materials costs of $900,000 and total overhead costs of $1,170,000. If the company uses direct materials costs as its activity base to alloc...

Q: Xia Co. currently buys a component part for $5 per

Xia Co. currently buys a component part for $5 per unit. Xia believes that making the part would require $2.25 per unit of direct materials and $1.00 per unit of direct labor. Xia allocates overhead u...

Q: Marcelino Co.’s March 31 inventory of raw materials is $

Marcelino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchase in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred i...

Q: Bergamo Bay’s computer system generated the following trial balance on December 31

Bergamo Bay’s computer system generated the following trial balance on December 31, 2015. The company’s manager knows something is wrong with the trial balance beca...

Q: Widmer Watercraft’s predetermined overhead rate for 2015 is 200% of direct

Widmer Watercraft’s predetermined overhead rate for 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows. a. Pur...

Q: In December 2014, Learer Company’s manager estimated next year’s total direct

In December 2014, Learer Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wa...

Q: Sager Company manufactures variations of its product, a technopress, in

Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of work in process or finished goods but...

Q: Perez Mfg.’s August 31 inventory of raw materials is $

Perez Mfg.’s August 31 inventory of raw materials is $150,000. Raw materials purchase in September are $400,000, and factory payroll cost in September is $232,000. Overhead costs inc...

Q: Cavallo Mfg.’s computer system generated the following trial balance on

Cavallo Mfg.’s computer system generated the following trial balance on December 31, 2015. The company’s manager knows that the trial balance is wrong because it do...

Q: Starr Mfg.’s predetermined overhead rate is 200% of direct

Starr Mfg.’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during September 2015 follows. a. Purchased raw...

Q: In December 2014, Pavelka Company’s manager estimated next year’s total direct

In December 2014, Pavelka Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average w...

Q: King Company produces variations of its product, a megatron, in

King Company produces variations of its product, a megatron, in response to custom orders from its customers. On June 1, the company had no inventories of work in process or finished goods but held th...

Q: The computer workstation furniture manufacturing that Santana Rey started in January is

The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions’s job cost sheets show the followi...

Q: In December 2014, Custom Mfg. established its predetermined overhead rate

In December 2014, Custom Mfg. established its predetermined overhead rate for jobs produced during 2015 by using the following cost predictions: overhead costs, $750,000, and direct labor costs, $625,...

Q: In December 2014, Infodeo established its predetermined overhead rate for movies

In December 2014, Infodeo established its predetermined overhead rate for movies produced during 2015 by using the following cost predictions: overhead costs, $1,680,000, and direct labor costs, $480,...

Q: Moonrise Bakery applies factory overhead based on direct labor costs. The

Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during 2015: direct materials costs, $650,000; direct labor costs, $3,000,000; and factor...

Q: As of the end of June, the job cost sheets at

As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs. Job 102 was started in production in May and the following costs w...

Q: The following information is available for Lock-Tite Company, which

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. Compute the following amounts for the month of May....

Q: Refer to information in Exercise 19-7. Prepare the journal

Refer to information in Exercise 19-7. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold. Information from Exercise 19-7: The following informat...

Q: Use information in Exercise 19-7 to prepare journal entries for

Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage....

Q: In December 2014, Shire Computer’s management establishes the 2015 predetermined overhead

In December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimate...

Q: Lorenzo Company uses a job order costing system that charges overhead to

Lorenzo Company uses a job order costing system that charges overhead to jobs on the basis of direct material cost. At year-end, the Work in Process Inventory account shows the following. 1. Determi...

Q: Use information in Exercise 19-7 to prepare journal entries for

Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Direct labor usage. 2. Indirect labor usage. 3. Total payroll paid in cash. Information...

Q: Use information in Exercise 19-7 to prepare journal entries for

Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Incurred other overhead costs (record credit to Other Accounts). 2. Application of overhea...

Q: Question: Degelman Company uses a job order cost system and

Degelman Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2014, Job No. 50 was the only job in process. The costs incurred prio...

Q: Question: Agassi Company uses a job order cost system in each

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor ho...

Q: Thakin Stairs Co. designs and builds factory-made premium wooden

Thakin Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of v...

Q: Pedriani Company uses a job order cost system and applies overhead to

Pedriani Company uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2014, Job No. 25 was the only job in process. The costs incurred prio...

Q: Net Play Company uses a job order cost system in each of

Net Play Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A, direct labor...

Q: VideoPlus, Inc. manufactures two types of DVD players, a

VideoPlus, Inc. manufactures two types of DVD players, a deluxe model and a standard model. The deluxe model is a multi-format progressive-scan DVD player with networking capability, Dolby digital, an...

Q: Luxury Furniture designs and builds factory-made, premium, wood

Luxury Furniture designs and builds factory-made, premium, wood armoires for homes. All are of white oak. Its budgeted manufacturing overhead costs for the year 2014 are as follows. Overhead Cost Poo...

Q: Marquis Company estimates that annual manufacturing overhead costs will be $900

Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are direct labor cost $500,000, direct labor hours 50,000, and machine ho...

Q: Spin Cycle Company uses three activity pools to apply overhead to its

Spin Cycle Company uses three activity pools to apply overhead to its products. Each activity has a cost driver used to allocate the overhead costs to the product. The activities and related overhead...

Q: For Eckstein Company, the predetermined overhead rate is 130% of

For Eckstein Company, the predetermined overhead rate is 130% of direct labor cost. During the month, Eckstein incurred $100,000 of factory labor costs, of which $85,000 is direct labor and $15,000 is...

Q: Don Lieberman and Associates, a CPA firm, uses job order

Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concern...

Q: Beta Company uses a standard cost accounting system. In 2014,

Beta Company uses a standard cost accounting system. In 2014, 45,000 units were produced. Each unit took several pounds of direct materials and 2 standard hours of direct labor at a standard hourly ra...

Q: In October, Roby Company reports 21,000 actual direct labor

In October, Roby Company reports 21,000 actual direct labor hours, and it incurs $118,000 of manufacturing overhead costs. Standard hours allowed for the work done is 20,400 hours. The predetermined o...

Q: Some overhead data for Roby Company are given in BE23-6

Some overhead data for Roby Company are given in BE23-6. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $4 variable per direct labor hour and $50,000 fixed. Comp...

Q: Using the data in BE23-6 and BE23-10,

Using the data in BE23-6 and BE23-10, compute the overhead volume variance. Normal capacity was 25,000 direct labor hours Data in BE23-6 and BE23-10: In October, Roby Company reports 21,000 actual di...

Q: Mikan Company’s standard predetermined overhead rate is $9 per direct labor

Mikan Company’s standard predetermined overhead rate is $9 per direct labor hour. For the month of June, 26,000 actual hours were worked, and 27,000 standard hours were allowed. How much overhead was...

Q: How is the predetermined overhead rate determined when standard costs are used

How is the predetermined overhead rate determined when standard costs are used?

Q: The standard cost of product 5252 includes 1.9 hours of

The standard cost of product 5252 includes 1.9 hours of direct labor at $14.00 per hour. The predetermined overhead rate is $22.00 per direct labor hour. During July, the company incurred 4,100 hours...

Q: Xania Inc. uses a normal job-order costing system.

Xania Inc. uses a normal job-order costing system. Currently, a plantwide overhead rate based on machine hours is used. Xania’s plant manager has heard that departmental overhead rat...

Q: At the beginning of the year, Han Company estimated the following

At the beginning of the year, Han Company estimated the following: Overhead ………………………………….$582,400 Direct labor hours ………………………….80,000 Han uses normal costing and applies overhead on the basis of d...

Q: Bender Automotive Works Inc. manufactures a variety of front-end

Bender Automotive Works Inc. manufactures a variety of front-end assemblies for automobiles. A front-end assembly is the unified front of an automobile that includes the headlamps, fender, and surroun...

Q: At the beginning of the year, Estes Company estimated the following

At the beginning of the year, Estes Company estimated the following costs: Overhead ……………………………………..$450,000 Direct labor cost ……………………………..600,000 Estes uses normal costing and applies overhead o...

Q: Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional,

Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A co...

Q: Bender Automotive Works Inc. manufactures a variety of front-end assemblies

Bender Automotive Works Inc. manufactures a variety of front-end assemblies for automobiles. A front-end assembly is the unified front of an automobile that includes the headlamps, fender, and surroun...

Q: FireOut, Inc. manufactures steel cylinders and nozzles for two models

FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,00...

Q: Lytton Ltd. uses a normal job-costing system with two

Lytton Ltd. uses a normal job-costing system with two direct cost categories (direct materials and direct labour) and one indirect cost pool. It allocates manufacturing overhead to jobs using a predet...

Q: In October, Pine Company reports 21,000 actual direct labor

In October, Pine Company reports 21,000 actual direct labor hours, and it incurs $118,000 of manufacturing overhead costs. Standard hours allowed for the work done is 20,600 hours. The predetermined o...

Q: Some overhead data for Pine Company are given in BE26.6

Some overhead data for Pine Company are given in BE26.6. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $4 variable per direct labor hour and $50,000 fixed. Comp...

Q: Using the data in BE26.6 and BE26.10,

Using the data in BE26.6 and BE26.10, compute the overhead volume variance. Normal capacity was 25,000 direct labor hours. Data from BE26.6 & BE26.10: In October, Pine Company reports 21,000 actual d...

Q: Lott Company uses a job order cost system and applies overhead to

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to Jan...

Q: The Daniels Tool & Die Corporation has been in existence for a

The Daniels Tool & Die Corporation has been in existence for a little over three years. The company's sales have been increasing each year as it builds a reputation. The company manufactures dies...

Q: Pedro Morales and Associates, a CPA firm, uses joborder costing

Pedro Morales and Associates, a CPA firm, uses joborder costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerni...

Q: The consulting firm CMA Financial employs 40 full-time staff.

The consulting firm CMA Financial employs 40 full-time staff. The estimated compensation per employee is $105,000 for 1,750 hours. It charges all direct labour costs to clients. It includes any other...

Q: Bertrand Manufacturing uses a job-order cost system and applies overhead

Bertrand Manufacturing uses a job-order cost system and applies overhead to production on the basis of direct labour costs. On January 1, 2020, Job No. 50 was the only job in process. The costs incurr...

Q: Nicole Limited is a company that produces machinery to customer orders,

Nicole Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies manufacturing overhead to production using a predetermined rate. This overhead...

Q: Agassi Company uses a job-order cost system in each of

Agassi Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour...

Q: Lowry Manufacturing uses a job-order cost system and applies overhead

Lowry Manufacturing uses a job-order cost system and applies overhead to production on the basis of direct labour hours. On January 1, 2020, Job No. 25 was the only job in process. The costs incurred...

Q: Tel Corp. has the following estimated costs for 2020:

Tel Corp. has the following estimated costs for 2020: Calculate the predetermined overhead rate and job cost. Direct materials …………………………….. $ 160,000 Direct labour ………………………………… 2,000,000 Rent on fa...

Q: Net Play Company uses a job-order cost system in each

Net Play Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department A, direct labou...

Q: Avid Assemblers uses normal job-order costing to assign costs to

Avid Assemblers uses normal job-order costing to assign costs to products. The company assembles and packages 25 different products according to customer specifications. Products are worked on in batc...

Q: The following data were taken from the records of Cougar Enterprises,

The following data were taken from the records of Cougar Enterprises, a Canadian manufacturer that uses a normal job-order costing system: During December, the company worked on jobs numbered 70 thr...

Q: Baehr Company is a manufacturer with a fiscal year that runs from

Baehr Company is a manufacturer with a fiscal year that runs from July 1 to June 30. The company uses a normal job-order cost accounting system for its production costs. It uses a predetermined overhe...

Q: Based on the compatibility and efficiency of its newly designed sprinkler systems

Based on the compatibility and efficiency of its newly designed sprinkler systems, Waterways was successful in its bid to upgrade the irrigation systems for 10 soccer fields owned by the local municip...

Q: FireOut Inc. manufactures steel cylinders and nozzles for two models of

FireOut Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000...

Q: Stellar Stairs Co. designs and builds factory-made premium wooden

Stellar Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of...

Q: VidPlayers Inc. manufactures two types of DVD players: a deluxe

VidPlayers Inc. manufactures two types of DVD players: a deluxe model and a superior model. The deluxe model is a multi-format progressive-scan DVD player with networking capability, Dolby digital, an...

Q: Prime Furniture designs and builds premium factory-made wood armoires for

Prime Furniture designs and builds premium factory-made wood armoires for homes. All are made of white oak. Its budgeted manufacturing overhead costs for the year 2020 are as follows. Assign overhead...

Q: For Dene Company, the predetermined overhead rate is 150% of

For Dene Company, the predetermined overhead rate is 150% of direct labour cost. During the month, Dene incurred $100,000 of factory labour costs, of which $85,000 is direct labour and $15,000 is indi...

Q: Harbaugh Manufacturing company uses a standard cost accounting system. In 2020

Harbaugh Manufacturing company uses a standard cost accounting system. In 2020, 45,000 units were produced. Each unit took several kilograms of direct materials and two standard hours of direct labou...

Q: The standard cost of product 2525 includes 1.9 hours of

The standard cost of product 2525 includes 1.9 hours of direct labour at $14.00 per hour. The predetermined overhead rate is $22.00 per direct labour hour. During July, the company incurred 4,100 hour...

Q: The Fly Company provides advertising services for clients across the nation.

The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for e...

Q: Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows: Job 11-101…………………………………………………$6,240...

Q: Dash Industries Inc. manufactures recreational vehicles. Dash uses a job

Dash Industries Inc. manufactures recreational vehicles. Dash uses a job order cost system. The time tickets from April jobs are summarized as follows: Factory overhead is applied to jobs on the bas...

Q: High Desert Pottery works makes a variety of pottery products that it

High Desert Pottery works makes a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to app...

Q: Froya Fabrikker A/S of Bergen, Norway, is a

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufact...

Q: Gold Nest Company of Guandong, China, is a family-

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who r...

Q: Gitano Products operates a job-order costing system and applies overhead

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermin...

Q: Pat Miranda, the new controller of Vault Hard Drives, Inc

Pat Miranda, the new controller of Vault Hard Drives, Inc., has just returned from a seminar on the choice of the activity level in the predetermined overhead rate. Even though the subject did not sou...

Q: Privack Corporation has a standard cost system in which it applies overhead

Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: The Excel worksheet form that appears below is to be used to

The Excel worksheet form that appears below is to be used to recreate part of the example relating to Turbo Crafters that appears earlier in the chapter. The workbook, and instructions on how to compl...

Q: White Company has two departments, Cutting and Finishing. The company

White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its ra...

Q: Hobart Company manufactures attaché cases and suitcases. It has five manufacturing

Hobart Company manufactures attaché cases and suitcases. It has five manufacturing departments. The Molding, Component, and Assembly departments convert raw materials into finished goods;...

Q: Osborn Manufacturing uses a predetermined overhead rate of $18.20

Osborn Manufacturing uses a predetermined overhead rate of $18.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $218,400 of total manufacturing overhead for...

Q: The following cost data relate to the manufacturing activities of Chang Company

The following cost data relate to the manufacturing activities of Chang Company during the just completed year: The company uses a predetermined overhead rate of $25 per machine-hour to apply overhea...

Q: Refer to the information for Johnny Lee, Inc., in Exercise

Refer to the information for Johnny Lee, Inc., in Exercise 15-24. Assume that in a given month (December) the standard allowed machine hours for output produced was 5,500. Also, assume that the denomi...

Q: Erkens Company uses a job costing system with normal costing and applies

Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine-hours. At the beginning of the year, management estimated that the company would incur...

Q: Johnson Inc. is a job-order manufacturing company that uses

Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor...

Q: The Meyers CPA firm has the following overhead budget for the year

The Meyers CPA firm has the following overhead budget for the year: The firm estimates total direct labor cost for the year to be $1,700,000. The firm uses direct labor cost as the cost driver to ap...

Q: Richport Company manufactures products that often require specification changes or modifications to

Richport Company manufactures products that often require specification changes or modifications to meet customer needs. Consequently, Richport employs a job costing system for its operations. Althoug...

Q: Coffee Bean Inc. (CBI) processes and distributes a variety

Coffee Bean Inc. (CBI) processes and distributes a variety of coffee. CBI buys coffee beans from around the world and roasts, blends, and packages them for resale. Currently, the firm offers 15 coffee...

Q: Miami Valley Architects Inc. provides a wide range of engineering and

Miami Valley Architects Inc. provides a wide range of engineering and architectural consulting services through its three branch offices in Columbus, Cincinnati, and Dayton, Ohio. The company allocate...

Q: Outback Corporation manufactures tactical LED flashlights in Brisbane, Australia. The

Outback Corporation manufactures tactical LED flashlights in Brisbane, Australia. The firm uses an absorption costing system for internal reporting purposes; however, the company is considering using...

Q: World Gourmet Coffee Company (WGCC) is a distributor and processor

World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale....

Q: Fresh Pak Corporation manufactures two types of cardboard boxes used in shipping

Fresh Pak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the followin...

Q: Sounds Fine, Inc., manufactures two models of stereo speakers.

Sounds Fine, Inc., manufactures two models of stereo speakers. Cost estimates for the two models for the coming year are as follows: Each stereo speaker requires 10 hours of direct labor. Each Basic M...

Q: Travel craft Company manufactures a complete line of fiberglass suitcases and attaché

Travel craft Company manufactures a complete line of fiberglass suitcases and attaché cases. The firm has three manufacturing departments: Molding, Component, and Assembly. There are also...

Q: FiberCom, Inc., a manufacturer of fibre optic communications equipment,

FiberCom, Inc., a manufacturer of fibre optic communications equipment, uses a job-order costing system. Since the production process is heavily automated, manufacturing overhead is applied on the bas...

Q: Crunchem Cereal Company incurred the following actual costs during 20x1.

Crunchem Cereal Company incurred the following actual costs during 20x1. Direct material used ……………&...

Q: The following data pertain to the Oneida Restaurant Supply Company for the

The following data pertain to the Oneida Restaurant Supply Company for the year just ended. Required: 1. Compute the firm’s predetermined overhead rate for the year using each of th...

Q: Refer to the data for the preceding exercise for Oneida Restaurant Supply

Refer to the data for the preceding exercise for Oneida Restaurant Supply Company. Prepare a journal entry to add to work-in-process inventory the total manufacturing overhead cost for the year, assum...

Q: Design Arts Associates is an interior decorating firm in Berlin. The

Design Arts Associates is an interior decorating firm in Berlin. The following costs were incurred in the firm’s contract to redecorate the mayor’s offices. The fir...

Q: The controller for Tender Bird Poultry, Inc., estimates that the

The controller for Tender Bird Poultry, Inc., estimates that the company’s fixed overhead is $100,000 per year. She also has determined that the variable overhead is approximately $.10 per chicken rai...

Q: Finley Educational Products started and finished job number B67 during June.

Finley Educational Products started and finished job number B67 during June. The job required $4,600 of direct material and 40 hours of direct labor at $17 per hour. The predetermined overhead rate is...

Q: MarineCo, Inc., manufactures outboard motors and an assortment of other

MarineCo, Inc., manufactures outboard motors and an assortment of other marine equipment. The company uses a job-order costing system. Normal costing is used, and manufacturing overhead is applied on...

Q: Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is

Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to work-in-process on the basis of machine hours. On January 1 of the current year, there were no balances in wo...

Q: Troy Electronics Company calculates its predetermined overhead rate on a quarterly basis

Troy Electronics Company calculates its predetermined overhead rate on a quarterly basis. The following estimates were made for the current year. The firm’s main product, part number...

Q: Tiana Shar, the controller for Bondi Furniture Company, is in

Tiana Shar, the controller for Bondi Furniture Company, is in the process of analyzing the overhead costs for the month of November. She has gathered the following data for the month. The firmâ&...

Q: Scholastic Brass Corporation manufactures brass musical instruments for use by high school

Scholastic Brass Corporation manufactures brass musical instruments for use by high school students. The company uses a normal costing system, in which manufacturing overhead is applied on the basis o...

Q: Conundrum Corporation manufactures furniture. Due to a fire in the administrative

Conundrum Corporation manufactures furniture. Due to a fire in the administrative offices, the accounting records for November of the current year were partially destroyed. You have been able to piece...

Q: TeleTech Corporation manufactures two different colour printers for the business market.

TeleTech Corporation manufactures two different colour printers for the business market. Cost estimates for the two models for the current year are as follows: Each model of printer requires 20 hours...

Q: Burlington Clock Works manufactures fine, handcrafted clocks. The firm uses

Burlington Clock Works manufactures fine, handcrafted clocks. The firm uses a job-order costing system, and manufacturing overhead is applied on the basis of direct-labor hours. Estimated manufacturin...

Q: Jeffrey Vaughn, president of Frame-It Company, was just

Jeffrey Vaughn, president of Frame-It Company, was just concluding a budget meeting with his senior staff. It was November of 20x0, and the group was discussing preparation of the firmâ€
...

Q: The controller for Tulsa Medical Supply Company has established the following activity

The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers. An order for 1,000 boxes of medical-testing agent has the following production requi...

Q: Marsha Design is an interior design and consulting firm. The firm

Marsha Design is an interior design and consulting firm. The firm uses a job order cost system in which each client represents an individual job. Marsha Design traces direct labor and travel costs to...

Q: Jenkins Company uses a job order cost system with overhead applied to

Jenkins Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor rate is $20 per hour, and the predetermined overhead rate is $15 per dir...

Q: Following is partial information for Delamunte Industries for the month of August

Following is partial information for Delamunte Industries for the month of August: Jobs finished during August are summarized here: Required: At the end of August, only one job, Job 248, was still in...

Q: Wheeler’s Bike Company manufactures custom racing bicycles. The company uses a

Wheeler’s Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and expenses for the coming y...

Q: How is a predetermined overhead rate calculated? How does a company

How is a predetermined overhead rate calculated? How does a company decide which allocation base to use to calculate the rate?

Q: Rocky Mountain Corporation makes two types of hiking boots—Xactive and

Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product lines appear below: The company has a conventional costing syste...

Q: Rustafson Corporation is a diversified manufacturer of consumer goods. The company’s

Rustafson Corporation is a diversified manufacturer of consumer goods. The company’s activity-based costing system has the following seven activity cost pools: Required: 1. Compute t...

Q: Kunkel Company makes two products and uses a conventional costing system in

Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for...

Q: Marine, Inc., manufactures a product that is available in both

Marine, Inc., manufactures a product that is available in both a flexible and a rigid model. The company has made the rigid model for years; the flexible model was introduced several years ago to tap...

Q: For many years, Thomson Company manufactured a single product called LEC

For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called...

Q: A form for using Excel to recreate the Review Problem related to

A form for using Excel to recreate the Review Problem related to Aerodec, Inc., is shown below. For simplicity, the form excludes the Parts Administration and Material Receipts activities that were in...

Q: Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a

Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a job order cost system. The time tickets from June jobs are summarized as follows: Job 11-101 …………………... $ 4,...

Q: Information on Kwon Mfg.’s activities for its first month of

Information on Kwon Mfg.’s activities for its first month of operations follows. a. Purchased $100,000 of raw materials on credit. b. Materials requisitions show the following materi...

Q: The following information is available for ADT Company, which produces special

The following information is available for ADT Company, which produces special-order security products and uses a job order costing system. Overhead is applied using a predetermined overhead rate of 7...

Q: Shire Company’s predetermined overhead rate is based on direct labor cost.

Shire Company’s predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $747,500 of overhead costs and $575,000 of direct labor cost fo...

Q: Lorenzo Company applies overhead to jobs on the basis of direct materials

Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following. 1. Determine the predetermined overhead rate use...

Q: Tasty Bakery applies overhead based on direct labor costs. The company

Tasty Bakery applies overhead based on direct labor costs. The company reports the following costs for the year: direct materials, $650,000; direct labor, $3,000,000; and overhead applied, $1,800,000....

Q: Tyler Corp. reports the following results for its first month of

Tyler Corp. reports the following results for its first month of operations ended December 31. Overhead is applied using a predetermined overhead rate of 80% of direct materials cost. 1. Prepare an in...

Q: At the beginning of the year, Custom Mfg. set its

At the beginning of the year, Custom Mfg. set its predetermined overhead rate using the following estimates: overhead costs, $750,000, and direct materials costs, $625,000. At year-end, the company re...

Q: At the beginning of the year, Miramax set its predetermined overhead

At the beginning of the year, Miramax set its predetermined overhead rate for movies produced during the year by using the following estimates: overhead costs, $1,680,000, and direct labor costs, $480...

Q: Sofia Gomez runs a mobile pet grooming service. She charges $

Sofia Gomez runs a mobile pet grooming service. She charges $35 direct labor per grooming hour. She applies overhead to jobs on the basis of grooming hours. She predicts 800 grooming hours for the yea...

Q: Blue Sky Soda estimates total factory overhead costs of $4,

Blue Sky Soda estimates total factory overhead costs of $4,200,000 and total direct labor costs of $2,800,000 for its first year of operations. During January, the company used $80,000 of direct labor...

Q: Re-Tire produces bagged mulch from recycled tires. Production involves

Re-Tire produces bagged mulch from recycled tires. Production involves shredding tires and packaging the pieces in the Bagging department. All direct materials enter in the Shredding process. A predet...

Q: At the end of June, the job cost sheets at Ace

At the end of June, the job cost sheets at Ace Roofers show the following costs accumulated on three jobs. Additional information a. Job 5 was started in May, and the following costs were assigned to...

Q: Marco Company shows the following costs for three jobs worked on in

Marco Company shows the following costs for three jobs worked on in April. Additional Information a. Raw Materials Inventory has a March 31 balance of $80,000. b. Raw materials purchases in April are...

Q: At the beginning of the year, Learner Company’s manager estimated total

At the beginning of the year, Learner Company’s manager estimated total direct labor cost to be $2,500,000. The manager also estimated the following overhead costs for the year. For...

Q: Sager Company builds custom retaining walls for large commercial customers. On

Sager Company builds custom retaining walls for large commercial customers. On May 1, the company had no inventories of work in process or finished goods but held the following raw materials. On May 4...

Q: At the end of May, the job cost sheets at Cool

At the end of May, the job cost sheets at Cool Pool show the following costs accumulated on three jobs. Additional information a. Job 8 was started in April, and the following costs were assigned to...

Q: Perez Company shows the following costs for three jobs worked on in

Perez Company shows the following costs for three jobs worked on in September. Additional Information a. Raw Materials Inventory has an August 31 balance of $150,000. b. Raw materials purchases in Se...

Q: At the beginning of the year, Paella Company’s manager estimated total

At the beginning of the year, Paella Company’s manager estimated total direct labor cost to be $1,500,000. The manager also estimated the following overhead costs for the year. For...

Q: King Company builds custom order fulfillment centers for large e-commerce

King Company builds custom order fulfillment centers for large e-commerce companies. On June 1, the company had no inventories of work in process or finished goods but held the following raw materials...

Q: Maya Co. currently buys a component part for $3 per

Maya Co. currently buys a component part for $3 per unit. Maya estimates that making the part would require $2.25 per unit of direct materials and $1.00 per unit of direct labor. Maya normally applies...

Q: Shin Co. reports the costs incurred below for the month ended

Shin Co. reports the costs incurred below for the month ended May 31. The company has no beginning Work in Process Inventory. Overhead is applied using a predetermined overhead rate of 120% of direct...

Q: A company estimates the following manufacturing costs at the beginning of the

A company estimates the following manufacturing costs at the beginning of the period: direct labor, $468,000; direct materials, $390,000; and factory overhead, $117,000. Compute its predetermined over...

Q: Jensen Fences uses job order costing. Manufacturing overhead is charged to

Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appea...

Q: Georgia Woods, Inc., manufactures furniture to customers’ specifications and uses

Georgia Woods, Inc., manufactures furniture to customers’ specifications and uses job order cosign. A predetermined overhead rate is used in applying manufacturing overhead to indivi...

Q: Winona Enterprises uses job order costing. Manufacturing overhead is charged to

Winona Enterprises uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information...

Q: Lincoln Estates manufactures log homes to customers’ specifications and uses job order

Lincoln Estates manufactures log homes to customers’ specifications and uses job order costing. A predetermined overhead rate is used in applying manufacturing overhead t...

Q: Florence Ltd is a manufacturing company with a financial year ending on

Florence Ltd is a manufacturing company with a financial year ending on 31 December Year 1. The company manufactures wooden storage units for schools and colleges, each job being planned to meet a cus...

Q: Craig Company uses a predetermined overhead rate to assign overhead to jobs

Craig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig’s production is machine intensive, overhead is applied on the basis of machine hours. The expected overhead f...

Q: Mariposa, Inc., produces machine tools and currently uses a plantwide

Mariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based on machine hours. Alice Chen, the plant manager, has heard that departmental overhead rates can offer signifi...

Q: On April 1, Sangvikar Company had the following balances in its

On April 1, Sangvikar Company had the following balances in its inventory accounts: Materials Inventory $12,730 Work-in-Process Inventory 21,340 Finished Goods Inventory 8,700 Work-in-process inventor...

Q: On August 1, Cairle Company’s work-in-process inventory

On August 1, Cairle Company’s work-in-process inventory consisted of three jobs with the following costs: During August, four more jobs were started. Information on costs added to th...

Q: Vince Kim, owner of EcoScape, noticed that the watering systems

Vince Kim, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtually identical amounts of prime cost. Vince met with the su...

Q: Foto-Fast Copy Shop provides a variety of photocopying and printing

Foto-Fast Copy Shop provides a variety of photocopying and printing services. On June 5, the owner invested in some computer-aided photography equipment that enables customers to reproduce a picture o...

Q: Primera Company produces two products and uses a predetermined overhead rate to

Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is...

Q: Golding Manufacturing, a division of Farnsworth Sporting, Inc., produces

Golding Manufacturing, a division of Farnsworth Sporting, Inc., produces two different models of bows and eight models of knives. The bow-manufacturing process involves the production of two major sub...

Q: Aurora Inc. estimates manufacturing overhead costs for the Year 3 accounting

Aurora Inc. estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation $344,000 Supplies 42,000 Materials handling 68,000 Property taxes 30,000 Product...

Q: Pawhuska Company estimates that its overhead costs for Year 2 will be

Pawhuska Company estimates that its overhead costs for Year 2 will be $720,000 and output in units of product will be 300,000 units. Required 1. Calculate Pawhuska’s predetermined overhead rate based...

Q: Tescott Company and Heizer Company both apply overhead to the Work in

Tescott Company and Heizer Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year. Requir...

Q: Logan Company and Clayton Company assign manufacturing overhead to Work in Process

Logan Company and Clayton Company assign manufacturing overhead to Work in Process Inventory using direct labor cost. The following information is available for the companies for the year: Required 1....

Q: Rasmussen Corporation expects to incur indirect overhead costs of $80,

Rasmussen Corporation expects to incur indirect overhead costs of $80,000 per month and direct manufacturing costs of $12 per unit. The expected production activity for the first four months of the ye...

Q: Ware Manufacturing Company produced 2,000 units of inventory in January

Ware Manufacturing Company produced 2,000 units of inventory in January Year 2. It expects to produce an additional 14,000 units during the remaining 11 months of the year. In other words, total produ...

Q: In Year 3, Santo Corporation incurred direct manufacturing costs of $

In Year 3, Santo Corporation incurred direct manufacturing costs of $56 per unit and manufacturing overhead costs of $600,000. The production activity for the four quarters of Year 3 are as follows. R...

Q: Kenta Manufacturing Company produced 800 units of inventory in January Year 2

Kenta Manufacturing Company produced 800 units of inventory in January Year 2. The company expects to produce an additional 7,200 units of inventory during the remaining 11 months of the year, for a t...

Q: Unit-level (variable) manufacturing costs for Jacinto Manufacturing Company

Unit-level (variable) manufacturing costs for Jacinto Manufacturing Company amount to $8. Fixed manufacturing costs are $9,000 per month. Production workers provided 800 hours of direct labor in Janua...

Q: Creswell Enterprises’ budget included the following estimated costs for the Year 3

Creswell Enterprises’ budget included the following estimated costs for the Year 3 accounting period. Depreciation on manufacturing equipment $ 30,400 Cost of manufacturing supplies 6,000 Direct labor...

Q: On January 1, Year 2, Tinicum Company estimated that its

On January 1, Year 2, Tinicum Company estimated that its total overhead costs for the coming year would be $646,000 and that it would make 34,000 units of product. Tinicum actually produced 34,600 uni...

Q: Pleasant Hill Manufacturing Company incurred actual overhead costs of $312,

Pleasant Hill Manufacturing Company incurred actual overhead costs of $312,000 during Year 2. It uses direct labor dollars as the allocation base for overhead costs. In Year 2, actual direct labor cos...

Q: Creek Company and Fort Company base their predetermined overhead rates on machine

Creek Company and Fort Company base their predetermined overhead rates on machine hours. The following information pertains to the companies’ most recent accounting periods. Required...

Q: Velez Corporation estimated its overhead costs would be $50,000

Velez Corporation estimated its overhead costs would be $50,000 per month except for January when it pays the $30,000 annual insurance premium on the manufacturing facility. Accordingly, the January o...

Q: In addition to other costs, Grosha Telephone Company planned to incur

In addition to other costs, Grosha Telephone Company planned to incur $600,000 of fixed manufacturing overhead in making 500,000 telephones. Grosha actually produced 508,000 telephones, incurring actu...

Q: Spiro Company manufactures molded candles that are finished by hand. The

Spiro Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle: 1.6 pounds Pri...

Q: Blanding Manufacturing started in Year 2 with the following account balances.

Blanding Manufacturing started in Year 2 with the following account balances. Transactions during Year 2 Purchased $6,000 of raw materials with cash. Transferred $7,500 of raw materials to the product...

Q: The following events apply to Milligan Manufacturing Company. Assume that all

The following events apply to Milligan Manufacturing Company. Assume that all transactions are cash transactions unless otherwise indicated. Transactions for the Year 1 Accounting Period 1. The compan...

Q: Lehigh Manufacturing Corporation was started with the issuance of common stock for

Lehigh Manufacturing Corporation was started with the issuance of common stock for $60,000. It purchased $14,000 of raw materials and worked on three job orders during Year 1 for which data follow. (A...

Q: Ladora Construction Company began operations on January 1, Year 1,

Ladora Construction Company began operations on January 1, Year 1, when it acquired $30,000 cash from the issuance of common stock. During the year, Ladora purchased $6,000 of direct raw materials and...

Q: Eminence Corporation makes rocking chairs. The chairs move through two departments

Eminence Corporation makes rocking chairs. The chairs move through two departments during production. Lumber is cut into chair parts in the cutting department, which transfers the parts to the assembl...

Q: Use the ending balances from Problem 12-15A as the beginning

Use the ending balances from Problem 12-15A as the beginning balances for this problem. The transactions for the second year of operation (Year 2) are described here. (Assume that all transactions are...

Q: Lisburn Plastic Products Company makes a plastic toy using two departments:

Lisburn Plastic Products Company makes a plastic toy using two departments: parts and assembly. The following data pertain to the parts department’s transactions in Year 2. 1. The beginning balance in...

Q: Wright Cola Corporation produces a new soft drink brand, Sweet Spring

Wright Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Wright’s beginning balances and data pertinent to the mi...

Q: Phalanges Systems, Inc. (PSI) makes keypads that it

Phalanges Systems, Inc. (PSI) makes keypads that it sells to manufacturers of products such as ATMs and PIN machines. The average materials cost per keypad is $4.70, and the average labor cost is $1.4...

Q: Pruitt Corporation’s overhead costs are usually $20,000 per month

Pruitt Corporation’s overhead costs are usually $20,000 per month. However, the company pays $120,000 of real estate tax on the factory facility in March. Thus, the overhead costs for March increase t...

Q: Newkirk Sporting Goods Co. manufactures baseballs. According to Newkirk’s Year

Newkirk Sporting Goods Co. manufactures baseballs. According to Newkirk’s Year 3 budget, the company planned to incur $180,000 of fixed manufacturing overhead costs to make 200,000 baseballs. Newkirk...

Q: Gould Manufacturing Company, which makes aluminum alloy wheels for automobiles,

Gould Manufacturing Company, which makes aluminum alloy wheels for automobiles, recently introduced a new luxury wheel that fits small sports cars. The company developed the following standards for it...

Q: Meadowbrook Manufacturing started Year 2 with the following account balances.

Meadowbrook Manufacturing started Year 2 with the following account balances. Cash $7,000 Common stock 5,600 Retained earnings 2,800 Raw materials inventory 600 Work in process inventory 440 Finishe...

Q: The following events apply to Andover Manufacturing Company. Assume that all

The following events apply to Andover Manufacturing Company. Assume that all transactions are cash transactions unless otherwise indicated. Transactions for the Year 1 Accounting Period 1. The company...

Q: Preston Corporation was created on January 1, Year 1, when

Preston Corporation was created on January 1, Year 1, when it received a stockholder’s contribution of $92,000. It purchased $21,000 of raw materials and worked on three job orders d...

Q: Prairie Roofing Corporation was founded on January 1, Year 1,

Prairie Roofing Corporation was founded on January 1, Year 1, when stockholders contributed $12,000 for common stock. During the year, Prairie purchased $6,400 of direct raw materials and used $5,520...

Q: Dawson Food Company makes frozen vegetables. Production involves two departments,

Dawson Food Company makes frozen vegetables. Production involves two departments, processing and packaging. Raw materials are cleaned and cut in the processing department and then transferred to the p...

Q: Use the ending balances from Problem 12-15B as the beginning

Use the ending balances from Problem 12-15B as the beginning balances for this problem. The transactions for the second year of operation (Year 2) are described here. (Assume that all transactions are...

Q: Letcher Corporation makes blue jeans. Its process involves two departments,

Letcher Corporation makes blue jeans. Its process involves two departments, cutting and sewing. The following data pertain to the cutting department’s transactions in Year 2. 1. The beginning balance...

Q: Fullerton Paper Products Corporation produces paper cups using two production departments,

Fullerton Paper Products Corporation produces paper cups using two production departments, printing and forming. Beginning balances and printing department data for Year 2 follow. 1. Fullerton Paper P...

Q: Bowen Bridge Company constructs bridges for the State of Kentucky. During

Bowen Bridge Company constructs bridges for the State of Kentucky. During Year 2, Bowen started work on three bridges. The cost of materials and labor for each bridge follows. The predetermined overhe...

Q: Since its inception, Batum Laboratory has produced a single product,

Since its inception, Batum Laboratory has produced a single product, Product S109. With the advent of automation, the company added the technological capability to begin producing a second product, Pr...

Q: Al Carmon says that his company has a difficult time establishing a

Al Carmon says that his company has a difficult time establishing a predetermined overhead rate because the number of units of product produced during a period is difficult to measure. What are two me...

Q: Refer to the information in Exercise 6-46 for Harmon Recycling

Refer to the information in Exercise 6-46 for Harmon Recycling Services (HRS). The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product p...

Q: Refer to the information in Exercise 6-46 and Problem 6

Refer to the information in Exercise 6-46 and Problem 6-69. An accounting student from the local college, working on a related project at HRS as a part of a course, suggested a further revision after...

Q: Redfern Audio produces audio equipment including headphones. At the Campus Facility

Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and...

Q: Refer to the data in Exercise 6-38. Required

Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Exercise 6-38:

Q: Refer to the data in Exercise 6-38. Required

Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses the number of units to allocate overhead costs. Exercise 6-38:

Q: Refer to the data in Exercise 6-38. Required

Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses direct material costs to allocate overhead costs. Exercise 6-38:

Q: Refer to the data in Exercise 6-38. Required

Refer to the data in Exercise 6-38. Required Compute the predetermined overhead rate assuming that Redfern Audio uses machine-hours to allocate overhead costs. Exercise 6-38:

Q: Kilbourne Appliances produces two models of beverage coolers for homes and offices

Kilbourne Appliances produces two models of beverage coolers for homes and offices, the KA-15 and the KA-24. Data on operations and costs for March follow. Required a. Compute the predetermined overhe...

Q: Refer to the data in Exercise 6-44. Required

Refer to the data in Exercise 6-44. Required a. Compute the predetermined overhead rate assuming that Kilbourne Appliances uses direct labor costs to allocate overhead costs. b. Draw the cost flow dia...

Q: Harmon Recycling Services (HRS), a not-for-profit

Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Required a. Compute the pre...

Q: Refer to the data in Exercise 6-46. Required

Refer to the data in Exercise 6-46. Required a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses revenue to allocate general operating...

Q: Refer to the data in Exercise 6-46. Required

Refer to the data in Exercise 6-46. Required a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the staff hours to allocate general o...

Q: Refer to the data in Exercise 6-46. Required

Refer to the data in Exercise 6-46. Required a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the staff cost to allocate general op...

Q: Heidelberg Fabrication manufactures two products, G-09 and G-

Heidelberg Fabrication manufactures two products, G-09 and G-35: Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: Re...

Q: Jason’s Custom Tooling (JCT) uses a job order cost system

Jason’s Custom Tooling (JCT) uses a job order cost system and applies overhead using a predetermined overhead rate based on direct labor costs. The following debits (credits) appeare...

Q: Benton Corporation manufactures computer microphones, which come in two models:

Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Manufacturing overhead in the plant h...

Q: A&R Quality Advisors is a small consulting firm offering quality

A&R Quality Advisors is a small consulting firm offering quality audits and advising services to small and mid-sized manufacturing firms. Quality audits entail reviewing, checking, and documenting...

Q: Whitlock Manufacturing uses a job costing accounting system for its production costs

Whitlock Manufacturing uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct materials costs to apply overhead to individual job...

Q: Sorrento Products uses a job costing accounting system for its manufacturing costs

Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-hours is used to apply overhead to individual jobs. An estimate of ov...

Q: Fisher Fixtures manufactures three types of lighting fixtures, with model names

Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct l...

Q: Bentley estimates manufacturing overhead of $1,200,000 for

Bentley estimates manufacturing overhead of $1,200,000 for 2022 and will apply overhead to units produced based on 400,000 machine hours. During 2022, Bentley used $1,280,000 of raw materials, paid $1...