Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-houls is used to apply overhead to

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-houls is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows: The expected volume is 200,000 machine-hours for the entire year, The following information is for March, when Jobs 302 and 304 were completed: Machine-hours (MH) Job 302 Job 304 Job 305 Direct labor-hours (DLH) Job 302 Job 304 Job 395 Labor costs Direct labor wages (all hours e \$32.00) Indirect labor wages ( 1,100 hours) Supervisory salaries Building occupancy costs (heat, light, depreciation, etc.) Factory facilities Sales and administrative offices Factory equipment costs Power Repairs and maintenance Other \begin{tabular}{r} \hline 6,700MH \\ 6,600MH \\ 4,000MH \\ 9,200DLH \\ 4,000DLH \\ 2,400DLH \\ $499,200 \\ 19,800 \\ 28,200 \\ $28,500 \\ 30,700 \\ $46,800 \\ 17,600 \\ 22,200 \\ $86,600 \\ \hline \end{tabular} a. 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 $12 per machine-hour. Use this amount in answering requirements [b] through [ f], as needed.) b. Compute the total cost of Job 302 when it is finished. c. How much of factory overhead cost was applled to Job 305 during March? d. What total amount of overhead was applled to jobs during March? e. Compute actual factory overhead incurred during March. f. At the end of the year, Sorrento Products had the following account balances: Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. Compute the total cost of Job 302 when it is finished. How much of factory overhead cost was applied to Job 305 during March? What total amount of overhead was applied to jobs during March? Compute actual factory overhead incurred during March. Show the overapplied overhead effect on the account balances (final balances after allocation) in the following table. \begin{tabular}{|l|rr|} \hline Overapplied overhead & & \\ \hline Work-in-process inventory & $ & 2,640,000 \\ \hline Finished goods inventory & $ & 960,000 \\ \hline Cost of goods sold & $ & 1,680,600 \\ \hline \end{tabular} Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-houls is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows: The expected volume is 200,000 machine-hours for the entire year, The following information is for March, when Jobs 302 and 304 were completed: Machine-hours (MH) Job 302 Job 304 Job 305 Direct labor-hours (DLH) Job 302 Job 304 Job 395 Labor costs Direct labor wages (all hours e \$32.00) Indirect labor wages ( 1,100 hours) Supervisory salaries Building occupancy costs (heat, light, depreciation, etc.) Factory facilities Sales and administrative offices Factory equipment costs Power Repairs and maintenance Other \begin{tabular}{r} \hline 6,700MH \\ 6,600MH \\ 4,000MH \\ 9,200DLH \\ 4,000DLH \\ 2,400DLH \\ $499,200 \\ 19,800 \\ 28,200 \\ $28,500 \\ 30,700 \\ $46,800 \\ 17,600 \\ 22,200 \\ $86,600 \\ \hline \end{tabular} a. 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 $12 per machine-hour. Use this amount in answering requirements [b] through [ f], as needed.) b. Compute the total cost of Job 302 when it is finished. c. How much of factory overhead cost was applled to Job 305 during March? d. What total amount of overhead was applled to jobs during March? e. Compute actual factory overhead incurred during March. f. At the end of the year, Sorrento Products had the following account balances: Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. Compute the total cost of Job 302 when it is finished. How much of factory overhead cost was applied to Job 305 during March? What total amount of overhead was applied to jobs during March? Compute actual factory overhead incurred during March. Show the overapplied overhead effect on the account balances (final balances after allocation) in the following table. \begin{tabular}{|l|rr|} \hline Overapplied overhead & & \\ \hline Work-in-process inventory & $ & 2,640,000 \\ \hline Finished goods inventory & $ & 960,000 \\ \hline Cost of goods sold & $ & 1,680,600 \\ \hline \end{tabular}

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

Accounting Ethics A Practical Approach

Authors: Howard J Levine

1st Edition

0692112898, 9780692112892

More Books

Students also viewed these Accounting questions

Question

What factors contribute most to the comprehension of read text?

Answered: 1 week ago

Question

what percent is -250,000 of 1,700,000?

Answered: 1 week ago

Question

Why has Negotiating Women, Inc. focused its attention on women?

Answered: 1 week ago