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limemole460Lv1
29 Sep 2019
Budget Actual Directlabor hours. . . . . . . . . . . . . .. . . . . . . . . . 7,600 hours 6,100 hours Machinehours. . . . . . . . . . . . . . . . .. . . . . . . . . . 7,000 hours 6,500 hours Depreciation on salespeople's autos. . . . . . . . . . . $21,500 $21,500 Indirectmaterials. . . . . . . . . . . . . . .. . . . . . . . . . $49,000 $54,500 Depreciation on trucks used to deliver uniforms tocustomers. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . $13,000 $10,500 Depreciation on plant and equipment. . . . . . . . . . . $66,000 $67,000 Indirectmanufacturing labor. . . . . . . . . .. . . . . . . $39,000 $40,000 Customerservice hotline. . . . . . . . . . . .. . . . . . . $19,500 $21,000 Plantutilities. . . . . . . . . . . . . . .. . . . . . . . . . . . . $35,000 $37,500 Directlabor cost. . . . . . . . . . . . . .. . . . . . . . . . . $71,000 $86,000
Requirement 1. Compute the predetermined manufacturing overhead rate. Enter the formula for predetermined manufacturingoverhead? rate, then compute therate. Estimated yearly overhead costs
/ Estimated yearly machine hours = Predetermined overhead rate
/ = permachine hour
Requirement 2. Calculate the allocated manufacturing overhead for the pastyear. Manufacturing Actualmachine hours x Predetermined overhead rate
= overheadallocated x =
Requirement 3. Compute the underallocated or overallocated manufacturing overhead.How will this underallocated or overallocated manufacturingoverhead be disposed? of? First calculate the preliminary manufacturing overhead balanceusing the? T-account. ManufacturingOverhead
Close the? under- or overallocatedoverhead to Cost of Goods Sold by journalizing theentry.?(Recorddebits? first, then credits.Exclude explanations from any journal? entries.) JournalEntry Date Accounts Debit Credit
Requirement 4. How can managers use accounting information to help controlmanufacturing overhead? costs? To help control manufacturing? overhead, managerscompare the actual line item amounts for ? depreciation on delivery trucks finished goods inventory manufacturing overhead work in process inventory withthe budgeted amounts. Managers will also investigate only ? small large differencesbetween actual and budgeted amounts to identify the reasons whyactual costs ? are the same as planned or budgeted costs are the same as previous years costs differ from planned or budgeted costs differ from previous years costs
Budget | Actual | |||
Directlabor hours. . . . . . . . . . . . . .. . . . . . . . . . | 7,600 | hours | 6,100 | hours |
Machinehours. . . . . . . . . . . . . . . . .. . . . . . . . . . | 7,000 | hours | 6,500 | hours |
Depreciation on salespeople's autos. . . . . . . . . . . | $21,500 | $21,500 | ||
Indirectmaterials. . . . . . . . . . . . . . .. . . . . . . . . . | $49,000 | $54,500 | ||
Depreciation on trucks used to deliver uniforms | ||||
tocustomers. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . | $13,000 | $10,500 | ||
Depreciation on plant and equipment. . . . . . . . . . . | $66,000 | $67,000 | ||
Indirectmanufacturing labor. . . . . . . . . .. . . . . . . | $39,000 | $40,000 | ||
Customerservice hotline. . . . . . . . . . . .. . . . . . . | $19,500 | $21,000 | ||
Plantutilities. . . . . . . . . . . . . . .. . . . . . . . . . . . . | $35,000 | $37,500 | ||
Directlabor cost. . . . . . . . . . . . . .. . . . . . . . . . . | $71,000 | $86,000 | ||
Requirement 1. Compute the predetermined manufacturing overhead rate.
Enter the formula for predetermined manufacturingoverhead? rate, then compute therate.
| / | Estimated yearly machine hours | = | Predetermined overhead rate | ||||
/ | = | permachine hour |
Requirement 2. Calculate the allocated manufacturing overhead for the pastyear.
Manufacturing | |||||||||
Actualmachine hours | x |
| = | overheadallocated | |||||
x | = |
Requirement 3. Compute the underallocated or overallocated manufacturing overhead.How will this underallocated or overallocated manufacturingoverhead be disposed? of?
First calculate the preliminary manufacturing overhead balanceusing the? T-account.
ManufacturingOverhead | |||||
Close the? under- or overallocatedoverhead to Cost of Goods Sold by journalizing theentry.?(Recorddebits? first, then credits.Exclude explanations from any journal? entries.)
JournalEntry | ||||
Date | Accounts | Debit | Credit | |
Requirement 4. How can managers use accounting information to help controlmanufacturing overhead? costs?
To help control manufacturing? overhead, managerscompare the actual line item amounts for withthe budgeted amounts. Managers will also investigate only differencesbetween actual and budgeted amounts to identify the reasons whyactual costs
?
depreciation on delivery trucks
finished goods inventory
manufacturing overhead
work in process inventory
?
small
large
?
are the same as planned or budgeted costs
are the same as previous years costs
differ from planned or budgeted costs
differ from previous years costs
Irving HeathcoteLv2
29 Sep 2019