Ch52_-_CD_Solutions - MGTB03 Chapter 5 (2) Solutions to...

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MGTB03 Chapter 5 (2) – Solutions to Class Discussion Questions 5.21 Job Costing, Over- and Underapplied Overhead, Journal Entries - Shane’s Shovels A. Notice that the company uses normal costing (overhead is allocated using an estimated rate). However, under normal costing the company is required to make an end-of-period adjustment for any overapplied or underapplied overhead. This means that the after- adjustment costs assigned to jobs completed will be actual cost: Direct materials issued to production $180,000 Indirect materials issued to production 30,000 Overhead incurred 250,000 Direct labour costs 75,000 Total Actual Costs Incurred $535,000 B. This month overhead was underapplied by $55,000. This is the difference between total overhead costs of $280,000 (indirect materials of $30,000 plus other manufacturing overhead incurred of $250,000) and manufacturing overhead allocated of $225,000. C. Work in process $180,000 Raw materials inventory (direct materials used) $180,000 Overhead cost control $30,000 Raw materials inventory (indirect materials used) $30,000 Overhead cost control $250,000 Various accounts
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This note was uploaded on 10/09/2011 for the course MANAGEMENT MGTB03H3 taught by Professor Liangchen during the Summer '09 term at University of Toronto- Toronto.

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Ch52_-_CD_Solutions - MGTB03 Chapter 5 (2) Solutions to...

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