Answered step by step
Verified Expert Solution
Question
1 Approved Answer
there are no opening balances Brighton Services repairs locomotive engines. It employs 100 full-time workers at $22 per hour. Despite operating at capacity, last year's
there are no opening balances
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $22 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 Jobs were acce 's. In total, 10 Jobs were accepted and completed, Incurring the following total costs. Direct materials Direct labor Manufacturing overhead $1,650,400 5,280,000 1,020,000 Of the $1,020,000 manufacturing overhead, 40 percent was variable overhead and 60 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last year, and overhead costs and the wage rate are not expected to change. For the first quarter of this year, Brighton Services completed two Jobs and was beginning the third (Job 103). The costs incurred follow. Job 101 102 103 Total manufacturing overhead Total marketing and administrative costs Direct Materials $ 138,780 108,000 95,500 Direct Labor $504,000 314,000 195,300 272,700 125, eee You are a consultant associated with Lodi Consultants, which Brighton Services has asked for help. Lodi's senior partner has examined Brighton Services's accounts and has decided to divide actual factory overhead by Job Into fixed and variable portions as follows. 1e1 102 103 Actual Manufacturing Overhead Variable Fixed $ 31,400 $ 105,500 29,000 89,700 6, 10e 11,eee $ 66,500 $ 206, 200 In the first quarter of this year, 30 percent of marketing and administrative cost was variable and 70 percent was fixed. You are told that Jobs 101 and 102 were sold for $874,000 and $580,000, respectively. All over- or underapplied overhead for the quarter is written off to Cost of Goods Sold. Required: a. Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year. b. Using last year's overhead costs and direct labor-hours as this year's estimate, calculate predetermined overhead rates per direct labor-hour for variable and fixed overhead. c. Present in T-accounts the normal manufacturing cost flows for the three jobs in the first quarter of this year. Use the overhead rates derived in requirement (b). d. Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year. Materials Inventory Wages Payable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Variable Manufacturing Overhead Fixed Manufacturing Overhead End. Bal. End. Bal. Work-in-Process Inventory Finished Goods Inventory Beg. Bal Beg. Bal. Cost of Goods Sold End. Bal Cost of Goods Sold Beg. Bal. Finished Goods End. Bal. Present in T-accounts the normal manufacturing cost flows for the three jobs in the first quarter of this year. Use the overhead rates derived in requirement (b). (Do not round intermediate calculations and Round your final answers to nearest whole dollar amounts.) Materials Inventory Wages Payable Beg. Bal. Beg. Bal. End. Bal. End, Bal Variable Manufacturing Overhead Fixed Manufacturing Overhead End. Bal. End. Bal Work-in-Process Inventory Finished Goods Inventory Beg. Bal. Beg. Bal. Cost of Goods Sold End. Bal End. Bal. Cost of Goods Sold Under-or Overapplied Overhead Beg. Bal. Beg. Bal. Finished Goods End. Bal End. Bal. Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems. (Round your final answers to nearest whole dollar amounts. Loss amounts should be indicated with a minus sign.) Actual Normal Operating profit (loss) Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started