Week 2, LO 5 Demo

Week 2, LO 5 Demo - Week 2: Systems Design: Job-Order...

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Week 2: Systems Design: Job-Order Costing Week 2 Skill Building Demonstration Problem 5 Apply Overhead Cost to Work in Process using a predetermined overhead rate. Learning Objective 5 Applying Manufacturing Overhead Manufacturing overhead costs are assigned to Work in Process by using a predetermined overhead rate. The predetermined overhead rate is calculated by dividing the estimated total manufacturing overhead cost for the year by the estimated total amount of the allocation base. Nonmanufacturing Costs Nonmanufacturing costs should not be reported in the Manufacturing Overhead account. Nonmanufacturing costs include all selling and administrative costs. It is important to remember that these costs have no affect on product costs. Definitions Assume that Popowits Pants Factory’s predetermined overhead rate is $8.00 per direct labor hour. During the month of December, 800 direct labor hours were used to make dress pants and 640 direct labor hours were used to casual pants. Required:
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Week 2, LO 5 Demo - Week 2: Systems Design: Job-Order...

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