E pilgrim would have applied overhead to production

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E. Pilgrim would have applied overhead to production by using the actual machine hours worked and the $20 application rate. Thus, the actual hours worked total 43,750 ($875,000 $20). F. $900,000 ÷ $20 = 45,000 hours ÷
AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Bloom's: A Difficulty: Hard Learning Objective: 03-04 Compute a predetermined overhead rate and explain its use in job-order costing for job-shop and batch- production environments. Learning Objective: 03-05 Prepare journal entries to record the costs of direct material Learning Objective: 03-06 Prepare a schedule of cost of goods manufactured Learning Objective: a schedule of cost of goods sold Learning Objective: and an income statement for a manufacturer. Learning Objective: and manufacturing overhead in a job-order costing system. Learning Objective: direct labor
Chapter 03 - Product Costing and Cost Accumulation in a Batch Production Environment 3-51 76. Finney & Associates is an interior decorating firm in Tucson. The following costs were incurred in a project to redecorate the mayor's offices:| The firm's budget for the year included the following estimates: Overhead is applied to contracts by using a predetermined overhead rate that is based on direct professional labor cost. Actual professional labor during the year was $655,000 and actual overhead was $793,000. Required: A. Determine the total cost to redecorate the mayor's offices. B. Calculate the under- or overapplied overhead for the year. Be sure to label your answer. AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Bloom's: A Difficulty: Hard Learning Objective: 03-08 Describe the process of project costing used in service industry firms and nonprofit organizations.
Chapter 03 - Product Costing and Cost Accumulation in a Batch Production Environment 3-52 77. Boxworth and Associates designs relatively small sports stadiums and arenas at various sites throughout the country. The firm's accountant prepared the following budget for the upcoming year: Eighty percent of professional staff salaries are directly traceable to client projects, a figure that falls to 60% for the administrative support staff and other operating costs. Traceable costs are charged directly to client projects; nontraceable costs, on the other hand, are treated as firm overhead and charged to projects by using a predetermined overhead application rate. Boxworth had one project in process at year-end: an arena that was being designed for Charlotte County. Costs directly chargeable to this project were: Required: A. Determine Boxworth's overhead for the year and the firm's predetermined overhead application rate. The rate is based on costs directly chargeable to firm projects. B. Compute the cost of the Charlotte County arena project as of year-end. C. Present three examples of "other operating costs" that might be directly traceable to the Charlotte County project.
Chapter 03 - Product Costing and Cost Accumulation in a Batch Production Environment 3-53 C. Possible examples include travel, overnight delivery fees, postage, selected costs related to

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