Question
PART A: Label Inc. uses a job order costing system. The estimated manufacturing overhead for the year is $2,000,000. The company has decided to allocate
PART A:
Label Inc. uses a job order costing system. The estimated manufacturing overhead for the year is $2,000,000. The company has decided to allocate the manufacturing overhead to products on the basis of direct labour hours. The estimated direct labor hours for the year are 80,000 hours.
- What is the pre-determine fixed overhead rate that will be used to apply manufacturing overhead to products?
Job # 101 has accumulated $10,000 of direct materials and $30,000 of direct labour costs. The rate per direct labour hour is $30.
- How much manufacturing overhead will be applied to Job #101?
- What is the total manufacturing cost of Job # 101?
Job # 102 has accumulated $40,000 of direct materials and $60,000 of direct labour costs. The rate per direct labour hour is $40.
- How much manufacturing overhead will be applied to Job #102?
- What is the total manufacturing cost of Job # 102 ?
Job # 103 has accumulated $12,000 of direct materials and $24,000 of direct labour costs. The rate per direct labour hour is $12.
- How much manufacturing overhead will be applied to Job #103?
- What is the total manufacturing cost of Job # 103 ?
At the end of the year BOOM Inc. produced over 150 different jobs. Actual manufacturing overhead costs amounted to $2,200,000 instead of the $2,000,000 estimated at the beginning of the year. The actual direct labour hours amounted to 100,000 hours instead of the 80,000 hours estimated at the beginning of the year.
- How much manufacturing overhead was applied to all of the 150+ jobs?
- Was the manufacturing overhead over or under applied?
- By how much was the manufacturing overhead over or under applied?
PART B:
Liason Inc. uses a job order costing system. The fixed manufacturing overhead for the year is $4,000,000. The company has decided to allocate the manufacturing overhead to products on the basis of machine hours. The estimated machine hours for the year are 500,000 hours.
- What is the pre-determine fixed overhead rate that will be used to apply fixed manufacturing overhead to products?
Job # 999 has accumulated $20,000 of direct materials and $10,000 of direct labour costs. The rate per direct labour hour is $25. To complete Job # 999, 1,000 machine hours were used.
- How much manufacturing overhead will be applied to Job # 999 ?
- What is the total manufacturing cost of Job # 999?
Job # 998 has accumulated $15,000 of direct materials and $60,000 of direct labour costs. The rate per direct labour hour is $25. To complete Job #998, 2,000 machine hours were used.
- How much manufacturing overhead will be applied to Job # 998 ?
- What is the total manufacturing cost of Job # 998 ?
Job # 997 has accumulated $75,000 of direct materials and $125,000 of direct labour costs. The rate per direct labour hour is $20. To complete Job #997, 50,000 machine hours were used.
- How much manufacturing overhead will be applied to Job #997 ?
- What is the total manufacturing cost of Job # 997 ?
At the end of the year Liason produced over 750 different jobs. Actual manufacturing overhead costs amounted to $4,800,000 instead of the $4,000,000 estimated at the beginning of the year. The actual machine hours amounted to 400,000 hours instead of the 500,000 hours estimated at the beginning of the year.
- How much fixed manufacturing overhead was applied to all 750+ jobs?
- Was the manufacturing overhead over or under applied?
- By how much was the manufacturing overhead over or under applied?
PART C:
Lilac Inc. uses a job order costing system. The estimated manufacturing overhead for the year is $3,500,000. The company has decided to allocate the manufacturing overhead to products on the basis of direct labour cost. The estimated direct labour costs for the year are $2,000,000.
- What is the pre-determine fixed overhead rate that will be used to apply fixed manufacturing overhead to products?
Job # 123 has accumulated $10,000 of direct materials and $20,000 of direct labour costs. The rate per direct labour hour is $25.
l. How much manufacturing overhead will be applied to Job #123?
m. What is the total manufacturing cost of Job # 123 ?
Job # 124 has accumulated $18,000 of direct materials and $60,000 of direct labour costs. The rate per direct labour hour is $60.
- How much manufacturing overhead will be applied to Job #124?
- What is the total manufacturing cost of Job # 124 ?
Job # 125 has accumulated $12,000 of direct materials and $25,000 of direct labour costs. The rate per direct labour hour is $25.
- How much manufacturing overhead will be applied to Job #125?.
- What is the total manufacturing cost of Job # 125 ?
At the end of the year over 40,000 different jobs were produced. Actual manufacturing overhead costs amounted to $3,200,000 instead of the $3,500,000 estimated at the beginning of the year. The actual direct labour costs amounted to $2,200,000 instead of the $2,000,000 estimated at the beginning of the year.
- How much manufacturing overhead was applied to all of the 40,000 + jobs?
- Was the manufacturing overhead over or under applied?
- By how much was the manufacturing overhead over or under applied?
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