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Chapter 3l sol class ex

# Chapter 3l sol class ex - EXERCISE 3-33 1 Predetermined...

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EXERCISE 3-33 1. Predetermined overhead rate = driver cost of level budgeted overhead ing manufactur budgeted (a) hours machine 20,000 \$650,000 = \$32.50 per machine hour (b) hours labor - direct 25,000 \$650,000 = \$26.00 per direct-labor hour (c) * \$325,000 \$650,000 = \$2.00 per direct-labor dollar or 200% of direct-labor cost *Budgeted direct-labor cost = 25,000\$13 2. Actual manufacturing overhead applied manufacturing overhead = overapplied or underapplied overhead (a) \$690,000 – (22,000)(\$32.50) = \$25,000 overapplied overhead (b) \$690,000 – (26,000)(\$26.00) = \$14,000 underapplied overhead (c) \$690,000 – (\$364,000 )(200%) = \$38,000 overapplied overhead Actual direct-labor cost = 26,000\$14 PROBLEM 3-44 1. M ISTER M UNCHIE , I NC . S CHEDULE OF C OST OF G OODS M ANUFACTURED F OR THE Y EAR E NDED D ECEMBER 31, 20 X 4 Direct material: Raw-material inventory, 12/31/x3 .................................... \$ 30,300 Add: Purchases of raw material ........................................ 117 ,000 Raw material available for use .......................................... \$147,300 Deduct: Raw-material inventory, 12/31/x4 ....................... 33,000 Raw material used ............................................................. \$114,300 Direct labor .............................................................................. 237,000 Manufacturing overhead: Indirect material ................................................................ \$ 14,700 Indirect labor ..................................................................... 87,000

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Depreciation on factory building ...................................... 11,400 Depreciation on factory equipment ................................... 6,300 Utilities .............................................................................. 18,000 Property taxes .................................................................... 7,200 Insurance ........................................................................... 10,800 Rental of warehouse space ................................................ 9,300 Total actual manufacturing overhead ........................... \$164,700 Add: Overapplied overhead* ........................................ 9,300 Overhead applied to work in process ................................ 174 ,000 Total manufacturing costs ........................................................ \$525,300 Add: Work-in-process inventory, 12/31/x3 ............................. 24 ,300 Subtotal .................................................................................... \$549,600 Deduct: Work-in-process inventory, 12/31/x4 ......................... 24 ,900 Cost of goods manufactured .................................................... \$524,700 *The Schedule of Cost of Goods Manufactured lists the manufacturing costs applied to work in process. Therefore, the overapplied overhead, \$9,300, must be added to total actual overhead to arrive at the amount of overhead applied to work in process. If there had been underapplied overhead, the balance would have been deducted from total actual manufacturing overhead. The amount of overapplied overhead is found by subtracting actual overhead, \$164,700 (as computed above), from applied overhead, \$174,000 (given). 2. M ISTER M UNCHIE , I NC . S CHEDULE OF C OST OF G OODS S OLD F OR THE Y EAR E NDED D ECEMBER 31, 20 X 4 Finished-goods inventory, 12/31/x3 ................................................................ \$ 42,000 Add: Cost of goods manufactured* ................................................................. 524,700 Cost of goods available for sale ....................................................................... \$566,700 Deduct: Finished-goods inventory, 12/31/x4 ................................................... 46,200 Cost of goods sold ............................................................................................ \$520,500 Deduct: Overapplied overhead ....................................................................... 9,300 Cost of goods sold (adjusted for overapplied overhead) .................................. \$511,200 *The cost of goods manufactured is obtained from the Schedule of Cost of Goods Manufactured. The company closes underapplied or overapplied overhead into cost of goods sold. Hence, the balance in overapplied overhead is deducted from cost of goods sold for the month. 3. M ISTER M UNCHIE , I NC . I NCOME S TATEMENT F OR THE Y EAR E NDED D ECEMBER 31, 20 X 4 Sales revenue ................................................................ \$617,400
Less: Cost of goods sold ............................................... 511,200 Gross margin ................................................................ \$106,200 Selling and administrative expenses: Salaries .................................................................. \$41,400 Utilities .................................................................. 7,500 Depreciation .......................................................... 3,600 Rental of office space ............................................ 5,100 Other expenses ...................................................... 12 ,000 Total ....................................................................... 69,600 Income before taxes ..................................................... \$36,600 Income tax expense ...................................................... 1 5,300 Net income ................................................................... \$ 2 1,300 PROBLEM 3-47 1. Machining Dept. overhead rate = budgeted overhead ÷ budgeted machine hours = \$2,000,000 ÷ 200,000 = \$10 per machine hour Assembly Dept. overhead rate = budgeted overhead ÷ budgeted direct-labor cost = \$1,540,000 ÷ \$2,800,000 = 55% of direct-labor cost 2.

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Chapter 3l sol class ex - EXERCISE 3-33 1 Predetermined...

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