ACCT 1B Lecture Notes - Lecture 23: Deferral, Accounts Receivable, Subledger

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amaranthgrasshopper262

29 Aug 2020

School

Irvine Valley College

Department

Accounting

Course

ACCT 1B

Professor

johnson

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Document Summary

Work in process inventory can be used instead of direct materials if working we a question talking about raw materials. Actual overhead costs are not charged to jobs actual overhead costs do not appear on the job, Actual overhead cost do not appear on the job sheet, nor the work in progress account. Only the applied overhead cost, based on the predetermined overhead rate, appears on the job sheet and in the work in process account. Non-manufacturing cost are not assigned to individual jobs; rather they are expensed in the period incurred (period cost) Total cost of job = direct materials + direct labour + predetermined overhead rate x actual. If you debit work in process inventory and credit manufacturing overhead is recording the application of manufacturing overhead costs. If actual overhead was more than applied overhead, in order to dispose you would credit overhead. If you have underapplied overhead it will increase your cost of good sold.

Related Questions

The Pacific Manufacturing Company operates a job-order costingsystem and applies overhead cost to jobs on the basis of directlabor cost. Its predetermined overhead rate was based on a costformula that estimated $113,100 of manufacturing overhead for anestimated allocation base of $87,000 direct labor dollars. Thecompany has provided the following data:

Inventories Beginning Ending

Raw materials $ 27,000 $ 10,000

Work in process $ 49,000 $ 36,000

Finished goods $ 74,000 $ 55,000

The following actual costs were incurred during the year:

Purchase of raw materials (all direct) $ 131,000

Direct labor cost $ 83,000

Actual manufacturing overhead costs:

Insurance, factory $ 8,700

Depreciation of equipment $ 18,000

Indirect labor $ 27,200

Property taxes $ 8,700

Maintenance $ 15,000

Rent, building $ 34,000

________________________________________

Compute the predetermined overhead rate for the year.

Predetermined overhead rate %

Compute the amount of underapplied or overapplied overhead forthe year. (Input the amount as a positive value.)

overhead $

Prepare a schedule of cost of goods manufactured for the year.Assume all raw materials are used in production as directmaterials. (Input all amounts as positive values.)

Pacific Manufacturing Company

Schedule of Cost of Goods Manufactured

Direct materials:

Total raw materials available

Raw materials used in production $

Total manufacturing cost

Cost of goods manufactured $

Compute the unadjusted cost of goods sold for the year. (Do notinclude any underapplied or overapplied overhead in your cost ofgoods sold figure.

Unadjusted cost of goods sold $

Job 137 was started and completed during the year. What pricewould have been charged to the customer if the job required $3,600in materials and $4,000 in direct labor cost, and the companypriced its jobs at 50% above the job%u2019s cost according to theaccounting system?

Price to customer $

Direct labor made up $8,500 of the $36,000 ending Work inProcess inventory balance. Supply the information missingbelow:

Direct materials $

Direct labor 8,500

Manufacturing overhead

Work in process inventory $ 36,000

carmineplatypus255

Southern Rim Parts estimates its manufacturing overhead to be$282,000 and its direct labor costs to be $940,000 for year 1. Thefirst three jobs that Southern Rim worked on had actual directlabor costs of $53,000 for Job 301, $78,000 for Job 302, and$115,000 for Job 303. For the year, actual manufacturing overheadwas $459,000 and total direct labor cost was $846,000.Manufacturing overhead is applied to jobs on the basis of directlabor costs using predetermined rates.

Overhead applied in each of the inventory accounts is asfollows:


Work-in-process inventory	$	25,380
Finished goodsinventory		63,450
Cost of goodssold		164,970

Required:

Prepare an entry to prorate the under- or overapplied overhead.(If no entry is requiredfor a transaction/event, select "No journal entry required" in thefirst account field.)

ivorybuffalo373

The Pacific Manufacturing Company operates a job-ordercosting system and applies overhead cost to jobs on the basis ofdirect labor cost. Its predetermined overhead rate was based on acost formula that estimated $113,100 of manufacturing overhead foran estimated allocation base of $87,000 direct labor dollars. Thecompany has provided the following data:

Inventories Beginning Ending

Raw materials $ 27,000 $ 10,000

Work in process $ 49,000 $ 36,000

Finished goods $ 74,000 $ 55,000

The following actual costs were incurred during theyear:

Purchase of raw materials (all direct) $ 131,000

Direct labor cost $ 83,000

Actual manufacturing overhead costs:

Insurance, factory $ 8,700

Depreciation of equipment $ 18,000

Indirect labor $ 27,200

Property taxes $ 8,700

Maintenance $ 15,000

Rent, building $ 34,000

________________________________________

Compute the predetermined overhead rate for theyear.

Predetermined overhead rate %

Compute the amount of underapplied or overapplied overheadfor the year. (Input the amount as a positive value.)

overhead $

Prepare a schedule of cost of goods manufactured for theyear. Assume all raw materials are used in production as directmaterials. (Input all amounts as positive values.)

Pacific Manufacturing Company

Schedule of Cost of Goods Manufactured

Direct materials:

Total raw materials available

Raw materials used in production $

Total manufacturing cost

Cost of goods manufactured $

Compute the unadjusted cost of goods sold for the year. (Donot include any underapplied or overapplied overhead in your costof goods sold figure.

Unadjusted cost of goods sold $

Price to customer $

Direct labor made up $8,500 of the $36,000 ending Work inProcess inventory balance. Supply the information missingbelow:

Direct materials $

Direct labor 8,500

Manufacturing overhead

Work in process inventory $ 36,000

**how to compute price to customer?

beigekoala601

ACCT 1B Lecture Notes - Lecture 23: Deferral, Accounts Receivable, Subledger

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