Question
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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