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7C3.51 Baehr Company is a manufacturer with a fiscal year that runs from July 1 to June 30. The company uses a normal job-order cost
7C3.51 Baehr Company is a manufacturer with a fiscal year that runs from July 1 to June 30. The company uses a normal job-order cost accounting system for its production costs. It uses a predetermined overhead rate based on direct labour hours to apply overhead to individual jobs. It prepared three budgets of overhead costs for the 2022 fiscal year as follows: Direct labour hours Variable overhead costs Fixed overhead costs Total overhead 100,000 $325,000 216,000 $541,000 120,000 140,000 $390,000 $455,000 216,000 216,000 $606,000 $671,000 Although the annual ideal capacity is 150,000 direct labour hours, company officials have determined that 120,000 direct labour hours represent the normal capacity for the year. The following information is for November 2022 when Jobs X-50 and X-51 were completed: Inventories, November 1 Raw materials and supplies Work in process (Job X-50) Finished goods Purchases of raw materials and supplies. Raw materials Supplies Materials and supplies requisitioned for production Job X-50 Job X-51 Job X-52 Supplies $ 10,500 54,000 112,500 $135,000 15,000 $ 45,000 37,500 25,500 12,000 $120,000 Factory direct labour hours (DLH) Job X-50 Job X-51 Job X-52 Labour costs Direct labour wages Indirect labour wages (4,000 hours) Supervisory salaries Building occupancy costs (heat, light, depreciation) Factory facilities Sales offices Administration offices Factory equipment costs Power Repairs and maintenance Depreciation Other 3,500 DLH 3,000 DLH 2,000 DLH $ 51,000 15,000 6,000 $ 72,000 $ 6,500 1,500 1,000 $ 9,000 $ 4,000 1,500 1,500 1,000 $ 8,000 Instructions a. Calculate the predetermined rate to be used to apply overhead to individual jobs during the fiscal year. b. Prepare a schedule showing the costs assigned to each of Jobs X-50, X-51, and X-52. c. Calculate the cost of goods manufactured for November. d. Calculate the cost assigned to work in process on November 30. e. Determine whether overhead for November is under-applied or over-applied, and by what amount. Other Instructions a. Calculate the predetermined rate to be used to apply overhead to individual jobs during the fiscal year. b. Prepare a schedule showing the costs assigned to each of Jobs X50,X51, and X52. c. Calculate the cost of goods manufactured for November. d. Calculate the cost assigned to work in process on November 30 . e. Determine whether overhead for November is underapplied or over-applied, and by what amount
7C3.51 Baehr Company is a manufacturer with a fiscal year that runs from July 1 to June 30. The company uses a normal job-order cost accounting system for its production costs. It uses a predetermined overhead rate based on direct labour hours to apply overhead to individual jobs. It prepared three budgets of overhead costs for the 2022 fiscal year as follows: Direct labour hours Variable overhead costs Fixed overhead costs Total overhead 100,000 $325,000 216,000 $541,000 120,000 140,000 $390,000 $455,000 216,000 216,000 $606,000 $671,000 Although the annual ideal capacity is 150,000 direct labour hours, company officials have determined that 120,000 direct labour hours represent the normal capacity for the year. The following information is for November 2022 when Jobs X-50 and X-51 were completed: Inventories, November 1 Raw materials and supplies Work in process (Job X-50) Finished goods Purchases of raw materials and supplies. Raw materials Supplies Materials and supplies requisitioned for production Job X-50 Job X-51 Job X-52 Supplies $ 10,500 54,000 112,500 $135,000 15,000 $ 45,000 37,500 25,500 12,000 $120,000 Factory direct labour hours (DLH) Job X-50 Job X-51 Job X-52 Labour costs Direct labour wages Indirect labour wages (4,000 hours) Supervisory salaries Building occupancy costs (heat, light, depreciation) Factory facilities Sales offices Administration offices Factory equipment costs Power Repairs and maintenance Depreciation Other 3,500 DLH 3,000 DLH 2,000 DLH $ 51,000 15,000 6,000 $ 72,000 $ 6,500 1,500 1,000 $ 9,000 $ 4,000 1,500 1,500 1,000 $ 8,000 Instructions a. Calculate the predetermined rate to be used to apply overhead to individual jobs during the fiscal year. b. Prepare a schedule showing the costs assigned to each of Jobs X-50, X-51, and X-52. c. Calculate the cost of goods manufactured for November. d. Calculate the cost assigned to work in process on November 30. e. Determine whether overhead for November is under-applied or over-applied, and by what amount.
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