Ch2, Job-Order Costing Calculating Unit Product Costs Part 15

[QUESTION] 244. Florek Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours.................................................... Total fixed manufacturing overhead cost......................... Variable manufacturing overhead per direct labor-hour. . 10,000 $31,000 $2.50 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $31,000 + ($2.50 per direct labor-hour × 10,000 direct labor-hours) = $31,000 + $25,000 = $56,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $56,000 ÷ 10,000 direct labor-hours = $5.60 per direct labor-hour Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 245. Meenach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 80,000 direct laborhours, total fixed manufacturing overhead cost of $160,000, and a variable manufacturing overhead rate of $2.30 per direct labor-hour. Recently Job X387 was completed and required 120 direct labor-hours. Required: Calculate the amount of overhead applied to Job X387. Answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $160,000 + ($2.30 per direct labor-hour × 80,000 direct labor-hours) = $160,000 + $184,000 = $344,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $344,000 ÷ 80,000 direct labor-hours = $4.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $4.30 per direct labor-hour × 120 direct labor-hours = $516 Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 246. Weakley Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $358,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $382,000 and 18,300 total machine-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. Answer: Estimated total fixed manufacturing overhead (a)... $358,000 Estimated activity level (b)...................................... 20,000 machine-hours Predetermined overhead rate (a) ÷ (b).................... $17.90 per machine-hour Actual activity level.................................................. 18,300 machine-hours Manufacturing overhead applied............................. $327,570 Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 247. Fillmore Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 60,000 direct labor-hours, total fixed manufacturing overhead cost of $96,000, and a variable manufacturing overhead rate of $3.30 per direct laborhour. Recently Job X809 was completed and required 100 direct labor-hours. Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job X809. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.30 per direct labor-hour × 60,000 direct labor-hours) = $96,000 + $198,000 = $294,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $294,000 ÷ 60,000 direct labor-hours = $4.90 per direct labor-hour c. Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $4.90 per direct labor-hour × 100 direct labor-hours = $490 Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 248. Thrall Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours........................................................ Total fixed manufacturing overhead cost......................... Variable manufacturing overhead per machine-hour....... 10,000 $50,000 $3.90 Recently Job K125 was completed and required 160 machine-hours. Required: Calculate the amount of overhead applied to Job K125. Answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $50,000 + ($3.90 per machine-hour × 10,000 machine-hours) = $50,000 + $39,000 = $89,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $89,000 ÷ 10,000 machine-hours = $8.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.90 per machine-hour × 160 machine-hours = $1,424 Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 249. Verry Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours.................................................... Total fixed manufacturing overhead cost......................... Variable manufacturing overhead per direct labor-hour. . 60,000 $342,000 $2.40 Recently Job X711 was completed and required 90 direct labor-hours. Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job X711. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $342,000 + ($2.40 per direct labor-hour × 60,000 direct labor-hours) = $342,000 + $144,000 = $486,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $486,000 ÷ 60,000 direct labor-hours = $8.10 per direct labor-hour c. Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.10 per direct labor-hour × 90 direct labor-hours = $729 Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 250. Trevigne Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year.................................................... Estimated activity level from the beginning of the year..... Actual total fixed manufacturing overhead........................ Actual activity level........................................................... $114,000 10,000 $104,000 9,400 machine-hours machine-hours Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. Answer: Estimated total fixed manufacturing overhead (a)... $114,000 Estimated activity level (b)...................................... 10,000 machine-hours Predetermined overhead rate (a) ÷ (b).................... $11.40 per machine-hour Actual activity level.................................................. 9,400 machine-hours Manufacturing overhead applied............................. $107,160 Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 251. Luarca Corporation has two manufacturing departments--Casting and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHs)................................. Estimated total fixed manufacturing overhead cost............. Estimated variable manufacturing overhead cost per MH. . . Casting 2,000 $11,600 $1.90 Customizing Total 3,000 5,000 $7,200 $18,800 $2.80 During the most recent month, the company started and completed two jobs--Job F and Job L. There were no beginning inventories. Data concerning those two jobs follow: Direct materials........................ Direct labor cost....................... Casting machine-hours............ Customizing machine-hours..... Job F Job L $10,600 $6,600 $24,400 $8,600 1,400 600 1,200 1,800 Required: Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. Calculate the selling prices for Job F and Job L. Answer: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead.......................................................... Estimated variable manufacturing overhead ($1.90 per MH × 2,000 MHs)...... Estimated total manufacturing overhead cost................................................... Customizing $11,600 3,800 $15,400 Estimated fixed manufacturing overhead.......................................................... Estimated variable manufacturing overhead ($2.80 per MH × 3,000 MHs)...... Estimated total manufacturing overhead cost................................................... $7,200 8,400 $15,600 The second step is to combine the estimated manufacturing overhead costs in the two departments ($15,400 + $15,600 = $31,000) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost ....... Estimated total machine hours............................... Predetermined overhead rate................................ $31,000 5,000 MHs $6.20 per MH The overhead applied to Job F is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $6.20 per MH x (1,400 MHs + 1,200 MHs) = $6.20 per MH x (2,600 MHs) = $16,120 The overhead applied to Job L is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $6.20 per MH x (600 MHs + 1,800 MHs) = $6.20 per MH x (2,400 MHs) = $14,880 Job F’s manufacturing cost: Direct materials.................................. Direct labor cost................................. Manufacturing overhead applied....... Total manufacturing cost.................... $10,600 24,400 16,120 $51,120 Job L’s manufacturing cost: Direct materials.................................. Direct labor cost................................. Manufacturing overhead applied....... Total manufacturing cost.................... $6,600 8,600 14,880 $30,080 The selling price for Job F: Total manufacturing cost................ Markup (50%)................................ Selling price................................... The selling price for Job L: Total manufacturing cost................ Markup (50%)................................ Selling price................................... Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] $51,120 25,560 $76,680 $30,080 15,040 $45,120 252. Lamberson Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours....................................................... Total fixed manufacturing overhead cost........................ Variable manufacturing overhead per machine-hour...... 50,000 $460,000 $3.10 Recently Job P647 was completed with the following characteristics: Number of units in the job............... Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 50 150 $740 $6,000 Required: a. Calculate the amount of overhead applied to Job P647. b. Calculate the total job cost for Job P647. c. Calculate the unit product cost for Job P647. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $460,000 + ($3.10 per machine-hour × 50,000 machine-hours) = $460,000 + $155,000 = $615,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $615,000 ÷ 50,000 machine-hours = $12.30 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $12.30 per machine-hour × 150 machine-hours = $1,845 b. Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job P647....................... c. Total cost of Job P647 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $740 6,000 1,845 $8,585 $8,585 50 $171.70 [QUESTION] 253. Mcewan Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 20,000 direct labor-hours, total fixed manufacturing overhead cost of $182,000, and a variable manufacturing overhead rate of $2.50 per direct labor-hour. Job X941, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total direct labor-hours................... Direct materials.............................. 250 $740 Direct labor cost............................. $6,500 Required: Calculate the selling price for Job X941 if the company marks up its unit product costs by 20%. Answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $182,000 + ($2.50 per direct labor-hour × 20,000 direct labor-hours) = $182,000 + $50,000 = $232,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $232,000 ÷ 20,000 direct labor-hours = $11.60 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $11.60 per direct labor-hour × 250 direct labor-hours = $2,900 Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job X941....................... $740 6,500 2,900 $10,140 Total cost of Job X941 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. $10,140 50 $202.80 Unit product cost for Job X941........... Markup (20% × $202.80)................... Selling price....................................... Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $202.80 40.56 $243.36 [QUESTION] 254. Teasley Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 70,000 machine-hours, total fixed manufacturing overhead cost of $630,000, and a variable manufacturing overhead rate of $3.40 per machine-hour. Job X159 was recently completed. The job cost sheet for the job contained the following data: Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 200 $670 $7,800 Required: Calculate the total job cost for Job X159. Answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $630,000 + ($3.40 per machine-hour × 70,000 machine-hours) = $630,000 + $238,000 = $868,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $868,000 ÷ 70,000 machine-hours = $12.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $12.40 per machine-hour × 200 machine-hours = $2,480 Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job X159....................... Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $670 7,800 2,480 $10,950 [QUESTION] 255. Alsobrooks Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours........................................................... Total fixed manufacturing overhead cost............................ Variable manufacturing overhead per machine-hour.......... 40,000 $156,000 $2.20 Recently Job M242 was completed with the following characteristics: Number of units in the job............... Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 20 60 $725 $1,680 Required: a. Calculate the total job cost for Job M242. b. Calculate the unit product cost for Job M242. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $156,000 + ($2.20 per machine-hour × 40,000 machine-hours) = $156,000 + $88,000 = $244,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $244,000 ÷ 40,000 machine-hours = $6.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $6.10 per machine-hour × 60 machine-hours = $366 Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job M242....................... $725 1,680 366 $2,771 Total cost of Job M242 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. Difficulty: 1 Easy $2,771 20 $138.55 b. Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 256. Ryans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours.................................................... Total fixed manufacturing overhead cost...................... Variable manufacturing overhead per machine-hour. . . 10,000 $71,000 $2.50 Recently Job P512 was completed with the following characteristics: Number of units in the job............... Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 30 60 $870 $2,400 Required: a. Calculate the predetermined overhead rate for the year. b. Calculate the amount of overhead applied to Job P512. c. Calculate the total job cost for Job P512. d. Calculate the unit product cost for Job P512. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $71,000 + ($2.50 per machine-hour × 10,000 machine-hours) = $71,000 + $25,000 = $96,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $96,000 ÷ 10,000 machine-hours = $9.60 per machine-hour b. Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $9.60 per machine-hour × 60 machine-hours = $576 c. Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job P512....................... $870 2,400 576 $3,846 Total cost of Job P512 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $3,846 30 $128.20 d.