Chapter 5 Solutions to Cornerstone Exercises

Chapter 5 Solutions to Cornerstone Exercises - CHAPTER 5...

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CHAPTER 5 CORNERSTONE EXERCISES Cornerstone Exercise 5–22 1. Predetermined overhead rate = cost labor direct Estimated overhead Estimated = $600,000 $450,000 = 0.75, or 75% of direct labor cost 2. Overhead applied to December production = 0.75 × $38,900 = $29,175 Cornerstone Exercise 5–23 1. Applied overhead = Overhead rate × Actual direct labor cost = 0.75 × $607,200 = $455,400 Actual overhead $456,500 Applied overhead 455,400 Overhead variance $ 1,100 underapplied 2. Unadjusted COGS $890,000 Add: Underapplied overhead 1,100 Adjusted COGS $891,100 Cornerstone Exercise 5–24 1. Cutting department overhead rate = 210,000 $378,000 = $1.80 per machine hour Sewing department overhead rate = 200,000 $450,000 = $2.25 per direct labor hour 2. Overhead applied to cutting in June = $1.80 × 17,840 = $32,112 Overhead applied to sewing in June = $2.25 × 16,000 = $36,000
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Cornerstone Exercise 5–24 (Concluded) 3. Cutting Department Sewing Department Actual overhead $32,612 $35,750 Less: Applied overhead
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Chapter 5 Solutions to Cornerstone Exercises - CHAPTER 5...

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