Reference no: EM131705364
Part -1:
1. Baehr Company is a manufacturing company with a fiscal year that runs from July 1 to June 30. The company uses a job-order accounting system for its production costs. A predetermined overhead rate based upon direct labor hours is used to apply overhead to individual jobs.
Assume Baehr's predetermined overhead rate is $4.50 per direct labor hour.
The information presented below is for November. Jobs 83-50 and 83-51 were completed during November.
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Inventories November 1:
Raw materials and supplies $
Work-in-process (Job 83-50)
Finished goods 112,500
Purchases of raw materials and supplies: Raw materials $135,000 Supplies
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10,500
54,000
15,000
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Materials and supplies requisitioned production:
Job 83-50 Job 83-51 Job 83-52 Supplies
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for
$ 45,000 37,500 25,500 12,000
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$120,000
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$150,000
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Factory direct labor hours:
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Labor costs:
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Job 83-50
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3,500
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Direct labor wages
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$51,000
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Job 83-51
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3,000
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Indirect labor wages (4,000 hours)
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15,000
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Job 83-52
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2,000
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Supervisory salaries
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6,000
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8,500
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$72,000
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Building occupancy costs (heat, light,
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Factory equipment costs:
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depreciation, etc.):
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Power
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$4,000
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Factory facilities
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$6,500
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Repairs and maintenance
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1,500
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Sales offices
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1,500
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Depreciation
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1,500
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Administrative offices
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1,000
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Other
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1,000
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$9,000
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$8,000
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Required:
A. Actual manufacturing overhead incurred during November was?
B. The total cost ofJob 83-50?
C. The manufacturing overhead costs applied to Job 83-52 during November?
D. The total amount of overhead applied to jobs during November was
2. Madtack Company's beginning and ending inventories for the month of November are
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Nov 1
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Nov30
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Direct materials
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$ 67,000
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$ 62,000
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Work-in-process
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145,000
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171,000
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Finished goods
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85,000
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78.000
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Production data for the month of November follows:
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Direct labor
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$200,000
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Actual manufacturing overhead
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132,000
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Direct materials purchased
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163,000
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Transportation in
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4,000
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Purchase retums and allowances
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2,000
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Madtack uses one overhead control account and charges overhead to production at 70% of direct labor cost. The company does not formally recognize over- or underapplied overhead until year end.
Based on the information above, determine the following:
A. Prime cost for November.
B. Total manufacturing cost for November.
C. Cost of goods transferred to finished goods inventory for November.
D. Madtack'soverapplied or underapplied for November.
3. The following information pertains to the August manufacturing activities of Griss Co.: Beginning work-in-process (BWIP) $12,000
Beginning work-in-process (BWIP) $12,000
Ending work-in-process (EWIP) 10,000
Cost of goods manufactured (COGM) 97,000
Direct materials issued to production 20,000
Manufacturing overhead is assigned at 150% of direct labor. What was the August direct labor?
4. Worley Company has underapplied overhead of $45,000 for the year. Before disposition of the underapplied overhead, selected year-end balances from Worley's accounting records were
Sales $1,200,000
Cost of goods sold 720,000
Direct materials inventory 36,000
Work-in-process inventory 54,000
Finished goods inventory 90,000
Under Worley's cost accounting system, over- or underapplied overhead is assigned to COGS based on year-end balances. In its year-end income statement, Worley should report COGS of?
Part -2
Babb Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
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Beginning Balance
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Ending Balance
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Raw materials.......
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$11,000
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$15,000
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Work in process....
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$32,000
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$14,000
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Finished goods.......
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$108,000
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$123,000
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The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,000 machine-hours and incur $272,000 in manufacturing overhead cost. The following transactions were recorded for the year:
- Raw materials were purchased, $416,000.
- Raw materials were requisitioned for use in production, $412,000 $(376,000 direct and $36,000 indirect).
- The following employee costs were incurred: direct labor, $330,000; indirect labor, $69,000; and administrative salaries, $157,000.
- Selling costs, $113,000.
- Factory utility costs, $29,000.
- Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities.
- Manufacturing overhead was applied to jobs. The actual level of activity for the year was 15,000 machine-hours.
- Sales for the year totaled $1,282,000.
Required:
a. Calculate the predetermine overhead rate
b. Determine the Manufacturing overhead applied
c. Prepare a schedule of cost of goods manufactured in good form.
d. Was the overhead underapplied or overapplied? By how much? Show your calculation.
e. Prepare journal entry to eliminate the underapplied or overapplied to Cost of Goods Sold account.