Acct306 Homework Ch04

Acct306 Homework Ch04 - CHAPTER 4 JOB COSTING 4-30...

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4-2 3c. Underallocated manufacturing overhead prorated based on 2011 overhead in ending balances: Account Dec. 31, 2011 Account Balance (Before Proration) (1) Allocated Manuf. Overhead in Dec. 31, 2011 Balance (Before Proration) (2) Allocated Manuf. Overhead in Dec. 31, 2011 Balance as a Percent of Total (3) = (2) ÷ \$114,000 Proration of \$3,000 Underallocated Manuf. Overhead (4) = (3) × \$3,000 Dec. 31, 2011 Account Balance (After Proration) (5) = (1) + (4) WIP \$ 50,700 \$ 10,260 a 0.09 0.09 × \$3,000 = \$ 270 \$ 50,970 Finished Goods 245,050 29,640 b 0.26 0.26 × \$3,000 = 780 245,830 Cost of Goods Sold 549,250 74,100 c 0.65 0.65 × \$3,000 = 1,950 551,200 Total \$845,000 \$114,000 1.00 \$3,000 \$848,000 a,b,c Overhead allocated = Direct manuf. labor cost × 50% = \$20,520; \$59,280; \$148,200 × 50% 4. Writing off all of the underallocated manufacturing overhead to Cost of Goods Sold (CGS) is usually warranted when CGS is large relative to Work-in-Process and Finished Goods Inventory and the underallocated manufacturing overhead is immaterial. Both these conditions apply in this case. ROW should write off the \$3,000 underallocated manufacturing overhead to Cost of Goods Sold Account.
4-3 4-31 Job costing, accounting for manufacturing overhead, budgeted rates.

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Acct306 Homework Ch04 - CHAPTER 4 JOB COSTING 4-30...

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