Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brighton Services repairs locomotive engines. It employs 100 full-time workers at $15 per hour. Despite operating at capacity, last year's performance was a great disappointment

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $15 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs. Direct materials Direct labor Manufacturing overhead $1,055,400 4,350,000 1,087,5ee of the S1,087,500 manufacturing overhead, 40 percent was variable overhead and 60 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last year, and overhead costs and the wage rate are not expected to change. For the first quarter of this year, Brighton Services completed two jobs and was beginning the third (Job 103). The costs incurred follow Job 101 102 103 Total manufaturing overhead Total marketing and administrative costs Direct Materials $ 139,200 113,000 96,000 Direct Labor $506,000 315,100 169,200 273,200 110,000 You are a consultant associated with Lodi Consultants, which Brighton Services has asked for help. Lodis senior partner has examined Brighton Services's accounts and has decided to divide actual factory overhead by job into fixed and variable portions as follows Actual Manufacturin Overhead Vaclable Fixed $31.900 $ 100.000 29,500 90,200 101 102 103 $ 60.000 1203.200 In the first quarter of this year, 40 percent of marketing and administrative cost was variable and 60 percent was fixed. You are told that Jobs 101 and 102 were sold for $877000 and $590,000, respectively. All over or underapplied overhead for the quarter is written off to Cost of Goods Sold Required: a. Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year. b. Using last year's overhead costs and direct labor hours as this year's estimate, calculate predetermined overhead rates per direct labor-hour for variable and fixed overhead c. Present in Taccounts the normal manufacturing cost flows for the three jobs in the first quarter of this year. Use the overhead rates derived in requirement (6) d. Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems Complete this question by entering your answers in the tabs below. Required A Required Required Required Using last year's overhead costs and direct labor-hours as this year's estimate, calculate predetermined overhead rate per direct labor hour for variable and fixed overhead (Round your awers to 2 decimal places) Predetermined Overhead Rate (Per Direct Libor Hour Variable overheid te Fixed ovecheada Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year. Materials inventory Wages Payable Beg Bali Beg Bal End. Bal End Bal Variable Manufacturing Overhead Fixed Manufacturing Overhead End Bal End Bal Work In Process inventory Finished Goods Inventory Beg Bal Beg Bal Cost of Goods Sold End Bal Ena Bal Cost of Goods Sold Beg B Finish Oood Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems. (Round your final answers to nearest whole dollar amounts. Loss amounts should be indicated with a minus sign.) Actual Normal Operating profit oss

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

Modern Auditing

Authors: William C. Boynton, Walter G. Kell

6th Edition

0471596876, 9780471596875

More Books

Students also viewed these Accounting questions

Question

It would have cost more to complain.

Answered: 1 week ago