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The following calendar year information about the Tahoma Corporation is available on December 31: Advertising expense.28,800 depreciation of factory...

"1. The following calendar year information about the Tahoma Corporation is available on December 31:

Advertising expense.................28,800
depreciation of factory equipment...42,320
depreciation of office equipment....10,800
direct labor........................142,600
factory utiXXties...................35,650
interest expense....................6,650
inventories Jan. 1
Raw materials....................3,450
Goods in process.................17,250
finished goods...................35,650
inventories Dec. 31
Raw materials....................2,300
Goods in process.................20,700
Finsished goods..................31,050
Raw materials purchases.............132,450
Rent on factory building............41,400
Indirect labor......................51,750
Sales commissions...................16,500

The company applies overhead on the basis of 125% of direct labor costs. Calculate the amount of over- or underapplied overhead.

2. A company uses a process cost accounting system. The following information is available regarding direct labor for the current year:

>Goods in process, January 1.....5,500 units, 80% complete
>goods in process, dec 31.....8,800 units, 40% complete
>units completed and tansferred
to finished goods.....46,900 units
>Direct labor costs during the year....$266,300

(a) Calculate the equivalent units of production for direct labor for the year.
(b) Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

3. A retail store has three departments, A, B, and C, each of which has four full-time employees. The store does general advertising that benefits all departments. Advertising expense totaled $90,000 for the current year, and departmental sales were:

Dept A......356,250
Dept B......641,250
Dept C......427,500

How much advertising expense should be allocated to each department?

Thank You,

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Solution of CH240410_481617_ACC.doc

"1. The following calendar year information about the Tahoma Corporation is available on
December 31:
Advertising expense.................28,800
depreciation of factory equipment...42,320...

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