Question
I need help on completing this homework, I got stuck. Thank you P4-14- 25 PUNTOS: Determining overhead rates, using direct labor cost, direct labor hour,
I need help on completing this homework, I got stuck. Thank you
P4-14- 25 PUNTOS:
Determining overhead rates, using direct labor cost, direct labor hour, and machine hour methods; determining job cost; computing underapplied and over applied overhead
College Station Manufacturing Inc. is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, $80,000; estimated materials costs, $60,000; estimated direct labor costs, $70,000; estimated direct labor hours, 15,000; estimated machine hours, 30,000; work in process at the beginning of the month, none.
The actual factory overhead incurred for November was $80,000, and the production statistics on November 30 are as follows:
Job | Materials Costs | Direct Labor Costs | Direct Labor Hours | Machine Hours | Date Jobs Completed |
101 | $7,000 | $8,000 | 2,000 | 4,000 | Nov. 10 |
102 | 9,000 | 14,000 | 3,000 | 4,200 | Nov. 11 |
103 | 10,000 | 15,500 | 3,500 | 5,000 | Nov. 12 |
104 | 11,000 | 17,600 | 3,600 | 4,400 | In process |
105 | 12,000 | 31,000 | 5,500 | 7,500 | Nov. 25 |
106 | 13,000 | 4,400 | 1,400 | 2,500 | In process |
Total | $62,000 | $90,500 | 19,000 | 27,600 |
Required:
Compute the predetermined rate, based on the following:
Direct labor cost
80,000/70,000= 1.14
Direct labor hours
80,000/15,000= 5.33
Machine hours 80,000/30,000= 2.66
Using each of the methods, compute the estimated total cost of each job at the end of the month.
Determine the under- or overapplied factory overhead, in total, at the end of the month under each of the methods.
Which method would you recommend? Why?
Compute the Predetermined Rates
Direct labor cost rate | ||||||||||||||||||||||||||||||||||||||
Direct labor hour rate | ||||||||||||||||||||||||||||||||||||||
Machine hour rate | ||||||||||||||||||||||||||||||||||||||
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2. Total cost of Jobs | ||||||||||||||||||||||||||||||||||||||
Job 101 | Job 102 | Job 103 | Job 104 | Job 105 | Job 106 | Total |
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Materials | 7,000 | 9,000 | 10,000 | 11,000 | 12,000 | 13,000 | 62,000 |
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Direct labor | 8,000 | 14,000 | 15,500 | 17,600 | 31,000 | 4,400 | 90,500 |
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Total prime cost | 15,000 | 23,000 | 25,500 | 28,600 | 43,000 | 17,400 | 152,500 |
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Applied overhead: Direct labor costs | 9,120 | 15,960 | 17,670 | 20,064 | 35,340 | 5,016 | 103,170 |
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Direct labor hour | 10,660 | 15,990 | 18,655 | 19,188 | 29,315 | 7,462 | 101,270 |
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Machine hour | 5,320 | 7,980 | 9,310 | 9,576 | 14,630 | 3,724 | 50,540 |
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Total cost using direct labor cost | 24,120 | 38,960 | 43,170 | 48,664 | 78,340 | 22,416 | 255,670 |
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Total cost using direct labor hour | 25,660 | 38,990 | 44,155 | 47,788 | 72,315 | 24,862 | 253,770 |
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Total cost using machine hour | 20,320 | 30,980 | 34,810 | 38,176 | 57,630 | 21,124 | 203,040 |
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direct labor hours |
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machine hours |
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3. Under-and overapplied overhead:
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