Ch5 (2) - In Class Discussion Qs.doc

The budgeted labour hours for the quarter are 2000

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labour rate is $25 per hour. The budgeted labour hours for the quarter are 2,000 hours. The actual overhead rate for this past quarter is $32.50 per labour hour. The cost information for work-in-process and finished goods is shown as follows: Work-in- Process Finished Goods Beginning Balance 0 106,000 Beginning Balance 21,500 ? Direct materials 31,500 106,000 Direct labour 52,000 Ending Balance 59,500 Manufacturing Overhead 65,000 The ending balance in the Work-in-Process account consists of 3 incomplete jobs. An analysis shows that 600 labour hours and overhead costs have been charged to these jobs. Required: A. Calculate the ending balance of work-in-process and the amount of cost of goods sold. B. Calculate the actual labour hours worked for the quarter. What is the budgeted manufacturing overhead rate per labour hour? What are the total budgeted overhead costs? C. Is the overhead over- or under-applied? Prepare an adjusting entry for the difference, assuming the amount is immaterial. D. Calculate the amount of direct materials, direct labour, and manufacturing overhead charged to those 3 incomplete jobs.
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5.55 Cost Flows, Job Costing, Cost Allocation, Over- and Underapplied Overhead Lucien Ltd. manufactures custom-made doors and uses a normal job costing system to allocate overhead costs, based on labour hours. The direct labour rate is $40 per hour. Direct materials used in the production amounted to $145,000. The additional cost information for last year is as follows: Budgeted manufacturing overhead $240,000 Budgeted labour hours 8,000 Actual manufacturing overhead $255,000
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