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Chapter 17: Q. 10SE-c (page 940)
The T-account showing the manufacturing overhead activity for Aliyah Corp. for 2018 is as follows:
Manufacturing overhead
| 195000 | 203,000 |
Requirements
3. Is manufacturing overhead underallocated or overallocated? By how much?
The manufacturing overhead is overallocated by the amount $8,000
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Lincoln Company completed jobs that cost \(38,000 to produce. In the same period,the company sold jobs for \)88,000 that cost $42,000 to produce. Prepare the journalentries for the completion and sales of the jobs. All sales are on account.
Question: Wesson Company is a consulting firm. The firm expects to have \(45,000 in indirect costs during the year and bill customers for 6,000 hours. The cost of direct labor is \)75 per hour.
16. Calculate the predetermined overhead allocation rate for Wesson using estimated billable hours for the allocation base.
17. Wesson completed a consulting job for George Peterson and billed the customer for 15 hours. What was the total cost of the consulting job?
18. If Wesson wants to earn a profit equal to 60% of the cost of a job, how much should the company charge Mr. Peterson?
Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
g. A cell phone manufacturer
Job 303 includes direct materials costs of \(550 and direct labor costs of \)400. If the predetermined overhead allocation rate is 40% of direct labor cost, what is the total cost assigned to Job 303?
June production generated the following activity in Bentley Chassis Company’s Work-in-Process Inventory account:
June 1 balance | \(36,000 |
Direct materials used | 32,000 |
Direct labor assigned to jobs | 40,000 |
Manufacturing overhead allocated to jobs | 28,000 |
Additionally, Bentley Chassis has completed Jobs 142 and 143, with total costs of
\)37,000 and $48,000, respectively.
Requirements
2. Open a T-account for Work-in-Process Inventory. Post the journal entry made in Requirement 1. Compute the ending balance in the Work-in-Process Inventory
account on June 30.
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