Renteria Company applies manufacturing overhead to jobs on the basis of machine hours used

ACC 560 Week 2 Assignment

E2-5 Renteria Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $305,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $322,000 of overhead costs are incurred and 130,000 hours are used.

1. Compute the manufacturing overhead rate for the year.
2. What is the amount of under- or overapplied overhead at December 31?
3. Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.

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Stockman Co. began 2010 with three jobs in process

Stockman Co. began 2010 with three jobs in process:

Type of Cost
Job No. Direct Material Direct Labor Overhead Total
247 $77,200 $91,400 36,560 $205,160
251 176,600 209,800 83,920 470,320
253 145,400 169,600 67,840 382,840
Totals $399,200 $470,800 $188,320 $1,058,320

During 2010, the following transactions occurred:

1. The firm purchased and paid for $542,000 of raw material.
Factory payroll records revealed the following:
- Indirect labor incurred was $54,000.
- Direct labor incurred was $602,800 and was associated with the jobs as follows:

Job No. Direct Labor Cost
247 $ 17,400
251 8,800
253 21,000
254 136,600
255 145,000
256 94,600
257 179,400

3. Material requistion forms issued during the year revealed the following:
- Indirect material issued totaled $ 76,000
- Direct material issued totaled $ 466,400 and was associated with jobs follows:

Job No. Direct Material Cost 247 $ 12,400
251 6,200
253 16,800
254 105,200
255 119,800
256 72,800
257 133,200

4. Overhead is applied to jobs on the basis of direct labor cost. Managment budgeted overhead of $ 240,000 and total direct labor cost of $ 600,000 for 2010. Actual total factory overhead costs ( including indirect labor and indirect material for the year totaled $ 244,400.

5. Jobs #247 through #255 were completed and delivered to customers, who paid for the goods in cash. The revenue on these jobs was $ 2,264,774.

a. Journalize all preceding events.
b. Determine the ending balances for the jobs still in process.
c. Determine the cost of jobs sold, adjusted for underapplied or oveapplied overhead.


Click here for the solution: Stockman Co. began 2010 with three jobs in process

Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2008

Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2008. Costs and Production Data Actual Standard Raw materials unit cost $2.25 $2.00 Raw materials units used 10,600 10,000 Direct labor payroll $122,400 $120,000 Direct labor hours worked 14,400 15,000 Manufacturing overhead-incurred $184,500 Manufacturing overhead applied $189,000 Machine hours expected to be used at normal capacity 42,500 Budgeted fixed overhead for June $51,000 Variable overhead rate per hour $3.00 Fixed overhead rate per hour $1.20 Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used. Hint: Compute variances, and prepare income statement. (a) Compute all of the variances for (1) direct materials and (2) direct labor. (3) Compute the total overhead variance. (b) Prepare an income statement for management. Ignore income taxes.

Click here for the solution: Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2008