Acct 2 Chapter 03 Selected Solutions rev jan 27 2009

Acct 2 Chapter 03 Selected Solutions rev jan 27 2009 -...

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Chapter 3 Systems Design: Job-Order Costing Exercise 3-3  (10 minutes) The predetermined overhead rate is computed as follows: Estimated total manufacturing overhead. ...... $586,000 ÷ Estimated total direct labor hours (DLHs). ..       40,000     DLHs = Predetermined overhead rate. ....................       $14.65     per DLH Exercise 3-4  (15 minutes) a. Raw Materials. ........................ 86,000 Accounts Payable. ......... 86,000 b. Work in Process. ..................... 72,000 Manufacturing Overhead. ....... 12,000 Raw Materials. ............... 84,000 c. Work in Process. ..................... 105,00 0 Manufacturing Overhead. ....... 3,000 Wages Payable. ............ 108,00 0 d. Manufacturing Overhead. ....... 197,00 0 Various Accounts. ......... 197,00 0
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Exercise 3-5  (10 minutes) Actual direct labor-hours. ......................... 12,600 × Predetermined overhead rate. ..............       $23.10     = Manufacturing overhead applied. .......... $291,060 Exercise 3-6  (15 minutes) 1. Actual manufacturing overhead costs. ............ $ 48,000 Manufacturing overhead applied: 10,000 MH × $5 per MH. ..............................       50,000     Overapplied overhead cost. ............................. $ 2,000 2. Direct materials: Raw materials inventory, beginning. ............. $ 8,000 Add purchases of raw materials. ..................   32,000     Raw materials available for use. ................... 40,000 Deduct raw materials inventory, ending. .......       7,000     Raw materials used in production. ................ $ 33,000 Direct labor. ..................................................... 40,000 Manufacturing overhead cost applied to work  in process. ....................................................       50,000     Total manufacturing cost. ................................ 123,000 Add: Work in process, beginning. ....................           6,000     129,000 Deduct: Work in process, ending. ....................           7,500     Cost of goods manufactured. .......................... $121,500
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Exercise 3-7  (20 minutes) Parts 1 and 2. Cash Raw Materials (a) 75,000 (a) 75,000(b) 73,000 (c) 152,000 (d) 126,000 Work in Process Finished Goods (b) 67,000 (f) 379,000 (c) 134,000 379,000(f) 379,000 (e) 178,000 379,000(f) 379,000 Manufacturing Overhead Cost of Goods Sold (b) 6,000(e) 178,000 (f) 379,000(g) 28,000 (c) 18,000 351,000 (d) 126,000 (g) 28,000 28,000
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Exercise 3-8  (10 minutes) 1. Actual direct labor-hours. ......................... 8,250 × Predetermined overhead rate. ..............       $21.40     = Manufacturing overhead applied. ......... $176,550 Less: Manufacturing overhead incurred. .   172,500     $          4,050     Manufacturing overhead overapplied. ..... $4,050 2. Because manufacturing overhead is overapplied, the cost of goods sold  would decrease by $4,050 and the gross margin would increase by  $4,050.
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This note was uploaded on 07/15/2010 for the course ECON 137A taught by Professor Watson during the Fall '08 term at UCSB.

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Acct 2 Chapter 03 Selected Solutions rev jan 27 2009 -...

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