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ACCOUNTING FOR OVERHEAD MaginaCompany employs a job order costing system to account for its production that passes through three departments.Three jobs ordered by valued client

ACCOUNTING FOR OVERHEAD

MaginaCompany employs a job order costing system to account for its production that passes through three departments.Three jobs ordered by valued client were started in July.The following data related to the three jobs are as follows:

Production Department

DirectLaborRate

Cost Driver Rates

Process 1

45/hr

150% of direct material cost

Process 2

40/hr

25 per machine hour

Process 3

35/hr

200% of directlaborcosts

Job Alpha

Job Beta

Job Charlie

Materials

Process 1

200,000

130,000

290,000

Process 2

15,000

25,000

70,000

Process 3

0

0

0

LaborHours

Process 1

2,500

2,000

1,500

Process 2

1,000

1,250

1,750

Process 3

7,500

9,000

12,5000

Machine Hours:

Process 1

0

0

0

Process 2

6,000

7,500

13,500

Process 3

750

1,500

1,000

Jobs Alpha and Beta were completed during July.

Determine the total costs charged to work in process by jobs.

Enchantress Manufacturing Company has four departments.Two producing departments - Assembly and Finishing, and two service departments - Cafeteria and Maintenance.The overhead cost of Cafeteria is allocated based on number of employees while the overhead cost of Maintenance is allocated based on estimated factory overhead.Assembly department used directlaborhours and finishing department used machine hours as bases in computing for pre-determined overhead rates.

Service Departments

Producing Departments

Cafeteria

Maintenance

Assembly

Finishing

Estimated Department Overhead

250,000

150,000

100,000

60,000

Estimated DirectLaborHour

200,000

100,000

Estimated Machine Hours

150,000

250,000

# of employees

100

20

1,500

1,000

Required: Allocate the service departments costs using direct method, sequential or step method starting with cafeteria and algebraic method.

The following budgeted information ofRylaiCrestfallCompany for the year 2019 is given below:

Service Departments

Producing Departments

S1

S2

P1

P2

Budgeted FOH before distribution of service costs

300,000

150,000

1,500,000

750,000

Directlaborhours

6,000

33,250

Machine hours

45,400

5,000

Number of employees

13

8

25

150

Area occupied

4,200 sq ft

1,500 sq ft

30,0000 sq ft

50,000 sq ft

Additional information:

a)thecompany computes predetermined overhead rates based on machine hours in P1 and based on directlaborhours in P2, after distributing services costs using direct method.

b)S1 costs are distributed based on area occupied and S2 costs are based on number of employees.

Determine the predetermined overhead rates for P1 and P2 and the total production costs of Job MM.

The following cost data are available for Ogre Magi Company for its first month of operation:

Direct materials

30,000

45,000

28,000

Directlaborat P20/hr

9,000

18,000

19,000

Overhead is applied at the rate of P16 per directlaborhour. Jobs No. 101 and 102 were completed.Job No. 101 was sold; Job No. 103 remained incomplete at the end of the month.

Ogre Magi Company incurred the following costs during the month:

Direct Material purchases

150,000

Direct and indirectlaborcosts

48,000

Factory overhead excluding indirectlaborand indirect materials

32,000

Indirect materials

2,0000

Compute for the balance of WIP account at the end of the month.Assuming the overhead variance is closed to cost of goods sold, the balance of cost of goods sold account after closing is?

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