(Comprehensive) The Steel Sentinel designs and manufactures perimeter fencing for large retail and commercial buildings. Each order...
Question:
(Comprehensive) The Steel Sentinel designs and manufactures perimeter fencing for large retail and commercial buildings. Each order goes through three stages: design, production, and installation. There were three jobs started and com¬ pleted during the first week in May 1998. There were no jobs in process at the end of April 1998. Information for the three departments for the first week in May follows:
Overhead is applied using departmental rates. Design and Installation use direct labor cost as the base, with rates of 40 percent and 90 percent, respectively. Production uses machine hours as the base, with a rate of $15 per hour.
Actual overhead in the Design Department for the month was $12,200. Actual overhead costs for the Production and Installation Departments were $7,200 and $3,850, respectively.
a. Determine the overhead to be applied to each job. By how much is the overhead underapplied or overapplied in each department? For the company?
b. Assume no journal entries have been made to Work in Process Inventory. Make all necessary entries to both the subsidiary ledger and general ledger accounts.
c. Calculate the total cost for each job.LO1
Step by Step Answer:
Cost Accounting Traditions And Innovations
ISBN: 9780538880473
3rd Edition
Authors: Jesse T. Barfield, Cecily A. Raiborn, Michael R. Kinney