Ch_3_solutions

Ch_3_solutions - (10 min.) S 3-4 Raw Materials Inventory...

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Unformatted text preview: (10 min.) S 3-4 Raw Materials Inventory Work in Process Inventory Bal. 16 Bal. 32 Purchases 230 Used 222 Direct materials 200 Bal. 24 Direct labor 320 Cost of goods Manufacturing manufactured 744 overhead 200 Bal. 8 Materials requisitioned (used) $222 Direct materials (200 ) Indirect materials $ 22 (10 min.) S 3-6 Req. 1 Journal DATE ACCOUNTS AND EXPLANATION S POST. REF. DEBIT CREDIT 1. Raw Materials Inventory 190,000 Accounts Payable 190,000 2. Work in Process Inventory 152,000 Manufacturing Overhead 22,000 Raw Materials Inventory 174,000 3. Manufacturing Wages 225,000 Wages Payable 225,000 4. Work in Process Inventory 190,000 Manufacturing Overhead 35,000 Manufacturing Wages 225,000 5. Manufacturing Overhead 30,000 Accum. Depreciation 20,000 Utilities Payable (or A/P) 10,000 6. Work in Process Inventory 81,000 Manufacturing Overhead 81,000 (continued) S 3-6 Req. 2 During January, actual manufacturing overhead costs totaled $87,000, while only $81,000 had been allocated to jobs. Therefore, by the end of January, manufacturing overhead had been underallocated by $6,000. Note: T-account not required. Manufacturing Overhead (Actual) (Allocated) (2) 22,000 (4) 35,000 (5) 30,000 (6) 81,000 6,000 (5 min.) S 3-10 Req. 1 Predetermined manufacturing = $1,200,000 overhead rate 50,000 direct labor hours = $24 per direct labor hour Req. 2 Predetermined manufacturing = $1,200,000 overhead rate $1,000,000 of direct labor = 120% of direct labor cost Req. 3 Predetermined manufacturing = $1,200,000 overhead rate 40,000 machine hours = $30 per machine hour (5-10 min.) S 3-11 Note: The predetermined manufacturing overhead rates shown below were from the solutions to S 3-10 Req. 1 Total manufacturing overhead allocated = Actual use of cost allocation base Predetermined manufacturing overhead rate = 52,300 hours $24 per direct labor hour = $1,255,200 Req. 2 Total manufacturing overhead allocated = Actual use of cost allocation base Predetermined manufacturing overhead rate = $1,025,000 120% = $1,230,000 Req. 3 Total manufacturing overhead allocated = Actual use of cost allocation base Predetermined manufacturing overhead rate = 39,500 machine hours $30 per machine hour = $1,185,000 (continued) S 3-11 Req. 4 The total amount of manufacturing overhead allocated to production during the year depends on the allocation base used to calculate the predetermined manufacturing overhead rate, as well as the actual quantity of the allocation base used during the year. The amount varies, depending upon these two factors. As a result, a company could either overallocate or underallocate manufacturing overhead, depending on the allocation base used and the actual manufacturing overhead for the year....
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This note was uploaded on 10/08/2011 for the course ACCT 101 taught by Professor Kang during the Spring '08 term at S.F. State.

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Ch_3_solutions - (10 min.) S 3-4 Raw Materials Inventory...

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