Problem No 1 (Short Questions)

i. Shanes Shovels produces small, custom earth moving equipment for landscaping

countries. Manufacturing overhead is allocated to work in process using an estimated

overhead rate. April, transactions for Shanes Shovels are included the following.

Direct materials issued to production	$180,000
Indirect materials issued to production	30,000
Other manufacturing overhead incurred	250,000
Overhead allocated	225,000
Direct Labor Costs	75,000

a) What was the cost of Job? ($ 480,000)

b) How much was the manufacturing overhead over-applied or under-applied.

($55,000 under applied)

ii. Squawk Box Ltd. Makes and sells a single product and uses a standard cost system.

During May, the company accountant, Mark Haines, budgeted $ 320,000 in

manufacturing overhead cost at a capacity activity of 20,000 machine hours.

At standard, each unit of finished product requires four machine hours.

The following data were reported during May.

Total actual manufacturing overhead incurred	$ 335,500
Units of product completed	4,700 units
Actual machine hours worked	21,000 machine hours

What was the amount of overhead that Squawk Box applied to Work-in-process?

(Applied overhead $300,800) First Calculate rate and then apply

iii. Solids Company uses a normal cost accounting system. Budgeted costs for the year

were $ 4 per Kg of raw material, $ 15 per direct labor hour and $ 20 per machine

hour. Budgeted production activity was 20,000 machine hours for the year. During

the year, the following were actually incurred for manufacturing

Kg of raw material used	65,000
Direct labor hours incurred	15,000
Machine hours incurred	19,000
Raw materials cost	$200,000
Direct labor costs	$247,000
Factory overhead costs	$358,000

How much was overhead over applied or under applied during the year.

($22,00 over applied)

iv. The Berger Company makes and sells a single product. The company reported the

Following production costs for each unit of product.

	Quantity	Cost
Direct Materials	15 kilogram	$0.45 per kilogram
Direct Labor	0.8 hours	$12 per hour
Manufacturing overhead	0.8 hours	? per hour

Manufacturing overhead is applied to production on the basis of direct labor hours.

If the finished goods inventory on Oct 31 was $123,540 (6,000 units), the

manufacturing cost per hour was: ($ 5.30)

v. Brown Corp manufactures products on a job order basis. The job cost sheet for Job

239 show the following for the month of May.

Direct materials	$5,000
Direct labor (100 hours @ $7.25)	725
Machine hours incurred	40
Predetermined overhead rate per machine hour	$26.00

At the end of May, what total cost appears on the job cost sheet for Job 329?

($ 6,725)