Question
1. Predetermined Factory Overhead Rate Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost
1.
Predetermined Factory Overhead Rate
Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:
Disposable supplies | $170,800 | |
Depreciation expense | 30,800 | |
Utilities | 17,900 | |
Nurse salaries | 256,500 | |
Technician wages | 84,000 | |
Total operating room overhead | $560,000 |
The overhead costs will be assigned to procedures based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.
a. Calculate the estimated number of operating room hours for the year. hours
b. Determine the predetermined operating room overhead rate for the year. $ per hour
c. Bill Harris had a 4-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (b)? $
d. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $36,400. Determine the overapplied operating overhead or underapplied operating overhead for the period. Enter your answer as a positive number. $
2.
Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January, the first month of operations:
a. Materials purchased on account, $29,800. | |
b. Materials requisitioned and factory labor used: |
Job | Materials | Factory Labor |
301 | $ 2,960 | $2,775 |
302 | 3,620 | 3,750 |
303 | 2,400 | 1,875 |
304 | 8,100 | 6,860 |
305 | 5,100 | 5,250 |
306 | 3,750 | 3,340 |
For general factory use | 1,080 | 4,100 |
c. Factory overhead costs incurred on account, $5,500. | |
d. Depreciation of machinery and equipment, $1,980. | |
e. The factory overhead rate is $54 per machine hour. Machine hours used: |
Job | Machine Hours |
301 | 25 |
302 | 36 |
303 | 30 |
304 | 72 |
305 | 40 |
306 | 25 |
Total | 228 |
f. Jobs completed: 301, 302, 303 and 305. | |
g. Jobs were shipped and customers were billed as follows: Job 301, $8,250; Job 302, $11,200; Job 303, $15,000. |
Required: | |||
1. | Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles. | ||
2. | Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. | ||
3. | Prepare a schedule of unfinished jobs to support the balance in the work in process account.* | ||
4. | Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.*
|
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tybee Industries Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Amount Descriptions | |
Job No. 301 | |
Job No. 302 | |
Job No. 303 | |
Job No. 304 | |
Job No. 305 | |
Job No. 306 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started