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
manufacturing overhead rate for the year. (Round answers to 2 decimal
places, e.g. 1.25.)
(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.
The ledger of Custer Company has the
following work in process account.
Work in Processâ€”Painting
5/1 Balance 4,170
5/31 Materials 7,190
5/31 Labor 3,510
5/31 Overhead 2,210
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.
(a) How many units are in process at
(b) What is the unit materials cost
(c) What is the unit conversion cost
(d) What is the total cost of units
transferred out in May?
(e) What is the cost of the May 31
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 companyâ€™s operations.
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.
(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