Question
Bronzing Casting Finishing Materials used............... $20,000 $10,000 $10,000 Direct labor cost................ $ 8,000 $ 5,000 $ 9,000 Direct labor hours.............. 1,000 500 1,620 Machine hours.............
Bronzing Casting Finishing
Materials used............... $20,000 $10,000 $10,000
Direct labor cost................ $ 8,000 $ 5,000 $ 9,000
Direct labor hours.............. 1,000 500 1,620
Machine hours............. 4,000 5,000 2,025
Factory overhead........ $20,000 $10,000 $16,200
The job cost system is used, and the February cost sheet for Job M45 shows the following:
Bronzing Casting Finishing
Materials used....... $20.00 $40.00 $20.00
Direct labor cost............... $64.00 $60.00 $54.00
Direct labor hours........ 8 6 6
Machine hours............ 2 3 1
The following actual information was accumulated during February:
Bronzing Casting Finishing
Direct labor hours........ 15,000 9,800 20,000
Factory overhead...... $350,000 $220,000 $325,000
Required:
1. Using the January data, ascertain the factory overhead application rates to be used during February, based on the following:
a.Direct labor cost
b.Direct labor hours
c.Machine hours
2. Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead.
3.Prepare the entries to record the following for February operations:
a.The liability for total factory overhead.
b.Distribution of factory overhead to the departments.
c..Application of factory overhead to the work in process, using direct labor hours. (Use the predetermined rate calculated in Requirement 1 and separate applied overhead accounts for each department.)
d.Closing of the applied factory overhead accounts.
e.Recording underapplied and overapplied factory overhead and closing the actual factory overhead accounts.
| 1. | Application Rates | |||||
| Basis | Bronzing | Casting | Finishing | |||
| a. | Direct labor cost.. | % | % | % | ||
| b. | Direct labor hours | |||||
| c. | Machine hours. | |||||
| 2. | Cost of Production | |||||
| Job M45 -- Direct Labor Cost Method | Bronzing | Casting | Finishing | Total | ||
| Materials | ||||||
| Direct labor cost.. | ||||||
| Factory overhead. | ||||||
| Total production cost.. | ||||||
| Job M45 -- Direct Labor Hour Method | Bronzing | Casting | Finishing | Total | ||
| Materials | ||||||
| Direct labor cost.. | ||||||
| Factory overhead. | ||||||
| Total production cost.. | ||||||
| Job M45 -- Machine Hour Method | Bronzing | Casting | Finishing | Total | ||
| Materials | ||||||
| Direct labor cost.. | ||||||
| Factory overhead. | ||||||
| Total production cost.. | ||||||
| 3. | Journal Entries | DR | CR | |||
| a. | ||||||
| b. | ||||||
| c. | ||||||
| d. | ||||||
| e. | ||||||
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