Standard Cost #2.docx - Pittsburg Pump Inc manufactures...

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Pittsburg Pump, Inc. manufactures bilge pumps for small boats. It uses a job-order costing system. Normal costing is used, and manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $1,420,000, and management expects that 71,000 machine hours will be used. Required a. Calculate the company’s predetermined overhead rate for the year. b. Prepare journal entries to record the following events, which occurred during April. 1. Purchased pump impellers from Marion Corporation for $7,850 on account. 2. Processed requisition from the Gauge Department supervisor for 300 pounds of clear plastic. The material cost $.60 per pound when it was purchased. 3. Processed the Testing Department’s requisition for 300 feet of electrical wire, which is considered an indirect material. The wire cost $.10 per foot when it was purchased. 4. Paid $800 in cash on electric utility bill for the factory. 5. Incurred direct-labor costs of $75,000 in April.

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