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Chapter 17: Q. 13SE-a (page 941)
Question: Using job order costing in a service company
Roth Accounting pays Jack Smith $90,000 per year.
Requirements
1. What is the hourly cost to Roth Accounting of employing Smith? Assume a
30-hour week and a 50-week year.
The Hourly cost of the Roth Accounting of employing smith is $60.
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June production generated the following activity in Bentley Chassis Company鈥檚 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
1. Prepare the journal entry for production completed in June.
Back Country manufactures backpacks. Its plant records include the following materials-related data
Journalize the entries to record the transactions, post to the Raw Materials Inventory account, and determine the ending balance in Raw Materials Inventory.
The manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:
Overhead allocated to production | \(409,200 |
Actual manufacturing overhead cost | 432,000 |
Predetermined overhead allocation rate | \)44 per machine hours |
Requirements
3. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead.
Question: Smith Company expected to incur \(10,000 in manufacturing overhead costs and use 4,000 machine hours for the year. Actual manufacturing overhead was \)9,700, and the company used 4,250 machine hours.
9. Calculate the predetermined overhead allocation rate using machine hours as the allocation base.
10. How much manufacturing overhead was allocated during the year?
Goldenrod Company makes artificial flowers and reports the following data for the month:
Purchases of materials, on account | $51,000 |
Materials requisition: | |
Direct material | 42,300 |
Indirect materials | 500 |
Labor incurred (not yet paid): | |
Direct labor | 20,300 |
Indirect labor | 1,340 |
Journalize the entries relating to materials and labor.
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