Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020,

image text in transcribed

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $21,000, direct labor $12,600, and manufacturing overhead $16,800. As of January 1, Job 49 had been completed at a cost of $94,500 and was part of finished goods inventory. There was a $15,750 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $128,100 and $165,900, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $94,500 on account. 2. 3. 4. Incurred factory labor costs of $73,500. Of this amount $16,800 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $17,850; indirect labor $21,000; depreciation expense on equipment $12,600; and various other manufacturing overhead costs on account $16,800. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,500 $5,250 51 40,950 26,250 52 31,500 21,000 (a) Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $882,000, direct labor costs of $735,000, and direct labor hours of 21,000 for the year. Predetermined overhead rate %

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

Principles Of Accounting

Authors: Robert Libby, Patricia Libby, Fred Phillips, Stacey Whitecotton

1st Edition

978-0077300456, 0077300459

More Books

Students also viewed these Accounting questions

Question

When removing a node from a binary search tree, what is one step?

Answered: 1 week ago

Question

How much should you pay people for doing each job?

Answered: 1 week ago