In december 2014 custom mfg established its

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Successful Project Management
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Chapter 7 / Exercise 2
Successful Project Management
Clements/Gido
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In December 2014, Custom Mfg. established its predetermined overhead rate for jobs produced during year 2015 by using the following cost predictions: overhead costs, $380,000, and direct labor costs, $200,000. At year-end 2015, the company’s records show that actual overhead costs for the year are $917,500. Actual direct labor cost had been assigned to jobs as follows. Jobs completed and sold $ 350,000 Jobs in finished goods inventory 74,000 Jobs in work in process inventory 54,000 Total actual direct labor cost $ 478,000 24. 1. Determine the predetermined overhead rate for year 2015. Overhead Rate Choose Numerator: / Choose Denominator: = Overhead Rate Estimated overhead costs / Estimated direct labor costs = Overhead rate $380,000 / $200,000 = 190% Explanation: Predetermined overhead rate Estimated overhead costs $ 380,000 Estimated direct labor costs $ 200,000 Rate (Overhead/ Direct labor) 190 %
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Successful Project Management
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Chapter 7 / Exercise 2
Successful Project Management
Clements/Gido
Expert Verified
25. 2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. Factory Overhead Actual overhead 917,500 908,200 Applied overhead Underapplied overhead 9,300 Explanation: Overhead applied to jobs = 190% × $478,000 = $908,200 26. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Date General Journal Debit Credit Dec 31 Cost of goods sold 9,300 Factory overhead 9,300 [The following information applies to the questions displayed below.] In December 2014, Infodeo established its predetermined overhead rate for movies produced during year 2015 by using the following cost predictions: overhead costs, $1,728,000,and direct labor costs, $480,000. At year-end 2015, the company’s records show that actual overhead costs for the year are $1,950,700. Actual direct labor cost had been assigned to jobs as follows. Movies completed and released $ 500,000 Movies still in production 45,000 Total actual direct labor cost $ 545,000
27. 1. Determine the predetermined overhead rate for year 2015. Overhead Rate Choose Numerator: / Choose Denominator: = Overhead Rate Estimated overhead costs / Estimated direct labor costs = Overhead rate $1,728,000 / $480,000 = 360% Explanation: Predetermined overhead rate Estimated overhead costs $ 1,728,000 Estimated direct labor costs $ 480,000 Rate ($1,728,000 / $480,000) 360 % 28. 2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. Factory Overhead Actual overhead 1,950,700 1,962,000 Applied overhead 11,300 Overapplied overhead Explanation: Overhead applied to jobs = 360% × $545,000 = $1,962,000 29. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Date General Journal Debit Credit Dec. 31 Factory overhead 11,300 Cost of goods sold 11,300 30. Award: 1.15 out of 2.00 points Show my answer
Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,300, direct labor of $3,700, and applied overhead of $3,145. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $32,000, Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July.

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