ACTG 2300 Lecture 20: Day 20 Notes

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purplecicada511

7 Feb 2017

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Variable = . 00 / hour * 20,000 hours = ,000 / hour. ---- #1 / #2 = . 70 per direct labor hour. ---- #1 / #2 = . 40 per direct labor hour. Actual allocation base incurred by each cost object. Difference between the manufacturing overhead cost applied (moca) and the actual manufacturing overhead cost (amoc) Manufacturing overhead applied > actual manufacturing overhead. Manufacturing overhead applied < actual manufacturing overhead. If not a large difference between applied and actual: overallocation = decrease cogs, underallocation = increase cogs. Overallocation - decrease: cogs, finished goods (fg) inventory, work in progress (wip) inventory. Underallocation - increase: cogs, finished goods (fg) inventory, work in progress (wip) inventory. 80,000 20,000 y = a + bx. 180 = a + . 00(20,000) a = ,000: y = 140,000 + 2. 00x y = 140,000 + 2. 0(60,000) y = ,000 = man. = ,000 = total manufacturing costs (4th quarter)

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EXERCISE 3-2 Apply Overhead [L03-2] Luthan Company uses a predetermined overhead rate of $23.40 per direct labor-hour. This prede- termined rate was based on a cost formula that estimated $257,400 of total manufacturing over- head for an estimated activity level of 11,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $249,000 and 10,800 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

Data
Allocation base
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	75,000	Machine-hours
Actual manufacturing overhead cost	$290,000
Actual total amount of the allocation base	68,000	Machine-hours
Enter a formula into each of the cells marked with a ?below
Computation of the predetermined overheadrate
Estimated manufacturing overhead cost
Estimated total amount of the allocation base	?	machine-hours
Predetermined overhead rate	?	per machine-hour
Computation of underapplied or overappliedmanufacturing overhead
Actual manufacturing overhead cost	?
Manufacturing overhead cost applied to Work in Process duringthe year:
Predetermined overhead rate	?	per machine hour
Actual total amount of the allocation base	?	machine-hours
Manufacturing overhead applied	?
Underapplied (overapplied) manufacturing overhead	?

byzantiumelk259

EXERCISE 3-1 Compute the Predetermined Overhead Rate [LO3-1] Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor- hours. At the beginning of the year, it estimated that 20,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $94,000 of fixed manu- facturing overhead expenses for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris's actual manufacturing overhead for the year was $123,900 and its actual total direct labor was 21,000 hours. Required: Compute the company's predetermined overhead rate for the year.

ACTG 2300 Lecture 20: Day 20 Notes

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