601 3, 5 solutions

601 3, 5 solutions - EXERCISE 3-33(20 MINUTES 1(a(b(c...

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EXERCISE 3-33 (20 MINUTES) 1. Predetermined overhead rate = driver cost of level budgeted overhea ing manufactur budgeted (a) hours machine 20,000 $650,000 = $32.50 per machine hour (b) hours labor - direct 25,000 $650,000 = $26.00 per direct-labor hour (c) * $325,000 $650,00 = $2.00 per direct-labor dollar or 200% of direct-labor cost *Budgeted direct-labor cost = 25,000 × $13 2. Actual manufacturi ng overhead applied manufactur ing overhead = overapplied or underapplied overhead (a) $690,000 – (22,000) ($32.50) = $25,000 overapplied overhead (b) $690,000 – (26,000) ($26.00) = $14,000 underapplied overhead (c) $690,000 – ($364,000 ) (200%) = $38,000 overapplied overhead Actual direct-labor cost = 26,000 × $14 PROBLEM 3-42 (20 MINUTES) 1. hour per $13 (10) (2,000) $260,000 hours labor - direct budgeted overhea ing manufactur budgeted rate overhead ned Predetermi = = = 2. Journal entries: (a) Raw-Material Inventory ....................... 34,800
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Accounts Payable ......................... 34,800 (b) Work-in-Process Inventory ................... 540 Raw-Material Inventory ................ 540 (c) Manufacturing Overhead ..................... 125 Manufacturing-Supplies Inventory 125 (d) Manufacturing Overhead ..................... 7,000 Accumulated Depreciation: Building .............................................. 7,000 (e) Manufacturing Overhead ..................... 300 Cash ............................................ 300 (f) Work-in-Process Inventory ................... 31,900 Wages Payable ............................. 31,900 To record direct-labor cost. Work-in-Process Inventory ................... 18,850 Manufacturing Overhead .............. 18,850 To apply manufacturing overhead to work in process ($18,850 = 1,450 x $13 per hour). (g) Manufacturing Overhead ..................... 890 Property Taxes Payable ................ 890 (h) Manufacturing Overhead ..................... 3,100 Wages Payable ............................. 3,100 PROBLEM 3-42 (CONTINUED) (i) Finished-Goods Inventory .................... 15,100 Work-in-Process Inventory ............ 15,100 (j) Accounts Receivable ............................ 14,400 Sales Revenue .............................. 14,400 Cost of Goods Sold .............................. 11,325* Finished-Goods Inventory ............. 11,325
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*$11,325 = (9/12)($15,100)
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PROBLEM 3-44 (45 MINUTES) 1. M ISTER M UNCHIE , I NC . S CHEDULE OF C OST OF G OODS M ANUFACTURED F OR THE Y EAR E NDED D ECEMBER 31, 20 X 4 Direct material: Raw-material inventory, 12/31/x3 ............ $ 30,300 Add: Purchases of raw material ............... 117 ,000 Raw material available for use ................ $147,30 0 Deduct: Raw-material inventory, 12/31/x4 ..................................................... 33,000 Raw material used .................................. $114,30 0 Direct labor ................................................. 237,000 Manufacturing overhead: Indirect material .................................... $ 14,700 Indirect labor ......................................... 87,000 Depreciation on factory building ............. 11,400 Depreciation on factory equipment ......... 6,300 Utilities .................................................. 18,000 Property taxes ....................................... 7,200 Insurance ............................................... 10,800 Rental of warehouse space ..................... 9,300 Total actual manufacturing overhead... $164,70 0 Add: Overapplied overhead* ................ 9,300 Overhead applied to work in process ....... 174 ,000 Total manufacturing costs ........................... $525,30 0 Add: Work-in-process inventory, 12/31/x3 .... 24 ,300 Subtotal ...................................................... $549,60 0 Deduct: Work-in-process inventory, 12/31/x4 ..................................................... 24 ,900 Cost of goods manufactured ........................ $524,70 0
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*The Schedule of Cost of Goods Manufactured lists the manufacturing costs applied to work in process. Therefore, the overapplied overhead, $9,300, must be added to total actual overhead to arrive at the amount of overhead applied to work in process. If there had been underapplied overhead, the balance would have been deducted from total actual manufacturing overhead. The amount of overapplied overhead is found by subtracting actual overhead, $164,700 (as computed above), from applied overhead, $174,000 (given).
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PROBLEM 3-44 (CONTINUED) 2. M ISTER M UNCHIE , I NC .
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