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Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine - hours is used to apply
Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machinehours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows.
Machinehours
Variable overhead costs $ $ $
Fixed overhead costs
Total overhead $ $ $
The expected volume is machinehours for the entire year. The following information is for March, when Jobs and were completed:
Inventories, March
Raw materials and supplies $
Work in process Job
Finished goods
Purchases of raw materials and supplies
Raw materials $
Supplies
Materials and supplies requisitioned for production
Job $
Job
Job
Supplies
$
Machinehours MH
Job MH
Job MH
Job MH
Direct laborhours DLH
Job DLH
Job DLH
Job DLH
Labor costs
Direct labor wages all hours @ $ $
Indirect labor wages hours
Supervisory salaries
Building occupancy costs heat light, depreciation, etc.
Factory facilities $
Sales and administrative offices
Factory equipment costs
Power $
Repairs and maintenance
Other
$
Required:
Compute the predetermined overhead rate combined fixed and variable to be used to apply overhead to individual jobs during the year.
Note: Regardless of your answer to requirement a assume that the predetermined overhead rate is $ per machinehour. Use this amount in answering requirements b through f as needed.
Compute the total cost of Job when it is finished.
How much of factory overhead cost was applied to Job during March?
What total amount of overhead was applied to jobs during March?
Compute actual factory overhead incurred during March.
At the end of the year, Sorrento Products had the following account balances:
Balance
Overapplied overhead $
Workinprocess inventory
Finished goods inventory
Cost of goods sold
Show the overapplied overhead effect on the account balances final balances after allocation in the following table.
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