Lund products inc uses a predetermined overhead rate in its

Assignment Help Accounting Basics

Reference no: EM13581392

Lund products, Inc., uses a predetermined overhead rate in its production, assembly, and testing departments. One rate is used for the entire company; it is based on machine hours. The rate is determined by analyzing data from the previous year to determine the percentage change in costs. Thus this year's overhead rate will be based on the percentage change multiplied by last year's costs. Lise Jensen is about to compute the rate for this year using the following data. Last year's costs Machine hours41,800 Overhead Costs Indirect Materials$57,850 Indirect Labor25,440 Supervision.41,580 Utilities11,280 Labor-related Costs9,020 Depreciation, Factory10,780 Depreciation, machinery27,240 Property Taxes2,880 Insurance1,920 Miscellaneous Overhead...4,840 Total Overhead$192,830 This year the cost of indirect materials is expected to increase by 30 percent over the previous year. The cost of indirect labor, utilities, machinery depreciation, property taxes, and insurance is expected to increase by 20 percent over the previous year. All other expenses are expected to increase by 10 percent over the previous year. Machine hours for this year are estimated at 45,980.

REQUIRED

1. Compute the projected costs and the overhead rate for this year using the information about expected cost increases. (Round your answer to three decimal places.) 2. During this year, Lund Products completed the following jobs using the machine hours shown: Job No. Machine Hours Job No. Machine Hours H-142 7,840 H-201 10,680 H-164 5,260 H-218 12,310 H-175 8,100 H-304 2,460 Determine the amount of overhead applied to each job. What was the total overhead applied during this year? (Round answers to the nearest dollar.) 3. Actual overhead costs for this year were $234,485. Was overhead under applied or over applied this year? By how much? Should the Cost of Goods Sold account be increased or decreased to reflect actual overhead costs? 4. At what point during this year was the overhead rate computed? When was it applied? Finally, when was under applied or over applied overhead determined and the Cost of Goods Sold account adjusted to reflect actual costs?

Reference no: EM13581392

Questions Cloud

Sahara desert homes sdh reports under ifrs and constructed : sahara desert homes sdh reports under ifrs and constructed a new subdivision during 2008 and 2009 under contract with

You are driving at a constant speednbspon a straight : you are driving at a constant speednbspon a straight highway that passes under an overpass. at time whennbspyour car

The president of the retailer prime products has just : the president of the retailer prime products has just approached the companys bank with a request for a 34000 90-day

Shannon polymers uses straight-line depreciation for : shannon polymers uses straight-line depreciation for financial reporting purposes for equipment costing 800000 and with

Lund products inc uses a predetermined overhead rate in its : lund products inc. uses a predetermined overhead rate in its production assembly and testing departments. one rate is

You have a small tax accounting preparation and bookkeeping : scenario summary you have a small tax accounting preparation and bookkeeping practice. a new client enters your office

Alongi corporation uses the following activity rates from : alongi corporation uses the following activity rates from its activity-based costing to assign overhead costs to

Fabiano brothers co is considering an investment that : fabiano brothers co. is considering an investment that requires immediate payment of 550000 and provides expected cash

Prepare the journal entry to record the redemption on july : the balance sheet for claremont company reports the following information on july 1 2012.claremont company balance

User Account

All Pages