Chpt 2 Homework - Part 2 - 1 Estimated cost and operating data for three companies for the upcoming year follow Company X Direct laborhours

Chpt 2 Homework - Part 2 - 1 Estimated cost and operating...

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1. Estimated cost and operating data for three companies for the upcoming year follow: Company X Company Y Company Z Direct labor- hours 85,000 50,000 52,000 Machine-hours 24,000 58,000 30,000 Direct materials cost $ 404,000 $ 317,000 $ 215,000 Manufacturing overhead cost $ 501,500 $ 237,800 $ 408,500 Predetermined overhead rates are computed using the following allocation bases in the three companies: Allocation Base Company X Direct labor-hours Company Y Machine-hours Company Z Direct materials cost Requirement 1: Compute each company's predetermined overhead rate. (Round your answers to 2 decimal places. Omit the "$" & "%" signs in your response.) Predetermined overhead rate Company X $ per DLH Company Y $ per MH Company Z % Explanation: Predetermined overhead rates: Company X: Predetermine d = Estimated total manufacturing overhead cost overhead rate Estimated total amount of the allocation base = $501,500 = $5.90 per DLH 85,000 DLHs
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Company Y: Predetermine d = Estimated total manufacturing overhead cost overhead rate Estimated total amount of the allocation base = $237,800 = $4.10per MH 58,000 MHs Company Z: Predetermine d = Estimated total manufacturing overhead cost overhead rate Estimated total amount of the allocation base = $408,500 = 190% of direct materials cost $215,000 direct materials cost Requirement 2: (a ) Assume that Company X works on three jobs during the upcoming year. Direct labor-hours recorded by job are: Job 418, 12,300 hours; Job 419, 37,500 hours; and Job 420, 30,500 hours. How much overhead will the company apply to Work in Process for the year? (Omit the "$" sign in your response.) Overhead cost $ (b ) If actual overhead costs total $548,000 for the year, will overhead be underapplied or overapplied? By how much? (Input the amount as positive value. Omit the "$" sign in your response.) Underapplied overhead cost $ Explanation: (b) Actual overhead costs incurred $ 548,000 Overhead cost applied to Work in Process: $5.90 per hour 473,770
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× 80,300* actual hours Underapplied overhead cost $ 74,230 *12,300 hours + 37,500 hours + 30,500 hours = 80,300 hours 2. Harwood Company uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would incur $161,500 in manufacturing overhead costs and work 85,000 machine-hours. Requirement 1: Compute the company's predetermined overhead rate. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Predetermined overhead rate $ per MH Requirement 2: Assume that during the year the company works only 79,600 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts. Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. (Omit the "$" sign in your response.) Manufacturing Overhead (Maintenance) 35,000 (a) (Indirect materials) 8,000 (Indirect labor) 65,000 (Utilities) 14,000 (Insurance) 9,000 (Depreciation) 41,000 Balance Work in Process (Direct materials) 531,000 (Direct labor) 85,000 (Overhead) (a)
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Requirement 3: (a ) Compute the amount of underapplied or overapplied overhead for the year and enter below.
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