Sea Explor manufactures deep-sea diving suits. The company records manufacturing costs by job number and uses a
Question:
Sea Explor manufactures deep-sea diving suits. The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products.
Sea Explor estimates they will manufacture 10,000 diving suits next year. For this amount of production, total factory overhead is estimated to be \($600,000.00.\) Estimated direct materials costs for next year are \($80.00\) A each suit manufactured. Estimated direct labor for next year is 4 labor hours for each suit at \($12.50\) per our.
Instructions:
1. Calculate Sea Explor’s factory overhead applied rate for next year for each of the following three bases.
(a) Direct materials cost.
(b) Direct labor cost.
(c) Direct labor hours.
On May 9, Sea Explor began work on Job No. 365. The order is for 55 SE80 diving suits for stock; date wanted May 19.
2. Open a cost sheet for Job No. 365 and record the following items.
3. Complete the cost sheet, recording factory overhead at the direct materials cost rate calculated in Instruction 1.
4. Prepare a finished goods ledger card for Stock No. SE80 diving suit. Minimum quantity is set at 30. Inventory location is Area J16.
5. Record on the finished goods ledger card the beginning balance on May 1. The May 1 balance of SE80 diving suits is 40 units at a unit cost of \($191.50.\) Sea Explor uses the last-in, first-out method to record inventory costs.
6. Record the following transactions on the finished goods ledger card for SE80 diving suits.
Step by Step Answer:
