Acc 561 wiley plus – week 4

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Description








Exercise 15-5



Duggan Company applies
manufacturing overhead to jobs on the basis of machine hours used. Overhead
costs are expected to total $353,920 for the year, and machine usage is
estimated at 126,400 hours.
For the year, $368,283 of overhead costs are incurred and 130,100 hours are
used.








(a)



Compute the
manufacturing overhead rate for the year. (Round answers to 2 decimal
places, e.g. 1.25.)









Manufacturing
overhead rate



$
















_________per machine
hour


(b) What is the amount of under or
over-applied overhead at December 31?

(c) Prepare the adjusting entry to
assign the under or over-applied overhead for the year to cost of goods sold.

Exercise 16-3

The ledger of Custer Company has the
following work in process account.


Work in Process—Painting











5/1 Balance 4,170


5/31 Materials 7,190


5/31 Labor 3,510


5/31 Overhead 2,210




5/31 Transferred
out ?



5/31 Balance ?





Production records show that there
were 500 units in the beginning inventory, 30% complete, 1,460 units started,
and 1,450 units transferred out. The beginning work in process had materials
cost of $2,480 and conversion costs of $1,690. The units in ending inventory were
40% complete. Materials are entered at the beginning of the painting process.

Instructions

(a) How many units are in process at
May 31?

(b) What is the unit materials cost
for May?

(c) What is the unit conversion cost
for May?

(d) What is the total cost of units
transferred out in May?

(e) What is the cost of the May 31
inventory?

Exercise 17-1

Wilkins Inc. has two types of
handbags: standard and custom. The controller has decided to use a plantwide
overhead rate based on direct labor costs. The president has heard of
activity-based costing and wants to see how the results would differ if this
system were used. Two activity cost pools were developed: machining and machine
setup. Presented below is information
related to the company’s operations.

Standard Custom

Direct labor costs $43,700 $102,000

Machine hours 1,500 1,380

Setup hours 96 440

Total estimated overhead costs are $298,400.
Overhead cost allocated to the machining activity cost pool is $195,100, and
$103,300 is allocated to the machine setup activity cost pool.

Instructions

(a) Compute the overhead rate using
the traditional (plant-wide) approach.

(b) Compute the overhead rates using
the activity-based costing approach.

(c) Determine the difference in allocation between the
two approaches.

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