Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Auto valet manufacturing uses a job order cost system in each of its three manufacturing department. Manufacturing overhead is applied to jobs on the basis

Auto valet manufacturing uses a job order cost system in each of its three manufacturing department. Manufacturing overhead is applied to jobs on the basis of direct labour cost in department A, direct labour hours in department B and machine hours in department C. The following estimates were used in establishing the predetermined overhead rates for 2017:

Departments

A

B

C

Manufacturing Overhead

840,000

902,000

850,000

Direct Labour Cost

600,000

100,000

600,000

Direct Labour Hours

50,000

41,000

50,000

Machine Hours

100,000

120,000

170,000

a) Calculate Auto Valet Predetermined overhead rate for each department.

b) During January 2017, the job cost sheets showed the following costs and production data:

Departments

A

B

C

Direct Material Used

88,000

85,000

69,000

Direct Labour Cost

50,000

37,400

48,600

Direct Labour Hours

4,000

3,500

4,200

Machine Hours

8,000

10,500

12,800

Manufacturing Overhead Incurred

78,000

69,500

67,200

Calculate the total manufacturing cost assigned to jobs in January in each department.

c) Calculate the manufacturing overhead variance for each department.

d) Using the total figures, state the journal entries necessary to record:

I.Total direct material used

II.Total direct labour costs incurred

III.Total manufacturing overhead incurred

IV.Total manufacturing overhead applied

e) Prepare the manufacturing overhead account, showing the overhead costs incurred and applied in each department. What is the balance on the account before closing?

f) State the journal entries necessary to dispose of the variance.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Fraud Audit Responding To The Risk Of Fraud In Core Business Systems

Authors: Leonard W. Vona

1st Edition

0470647264, 978-0470647264

More Books

Students also viewed these Accounting questions

Question

=+Who are you right now, and where do you want to be?

Answered: 1 week ago