Chapter 17: Q. 10SE-a (page 940)
The T-account showing the manufacturing overhead activity for Aliyah Corp. for 2018 is as follows
Manufacturing overhead
| 195,000 | 203,000 |
Requirements
1. What is the actual manufacturing overhead?
The actual manufacturing overhead is $195,000
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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.
Question: Using job order costing in a service company
Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.
Requirements
2. What indirect costs will be allocated to Client 507 if Jack Smith, an accountant at Roth Accounting, works 15 hours to prepare the financial statements?
Question: Record the following journal entries for Smith Company:
6. Purchased raw materials on account, \(10,000.
7. Used \)6,000 in direct materials and \(500 in indirect materials in production.
8. Incurred \)8,000 in labor costs, of which 80% was direct labor.
Question: Analyze the following T-accounts, and describe each lettered transaction. Note that some transactions may be compound entries.
Raw material inventory
(a) | (b) |
Work in process inventory
(b) | (f) |
(c ) | |
(e ) |
Finished goods inventory
(f) | (g) |
Prepaid insurance
(d) |
Account payable
(a) |
Wages payable
(c) |
Manufacturing overhead
(b) | (e) |
(c ) | (h) |
(d) |
Cost of goods sold
(g) | |
(h) |
Rosco Company estimates the company will incur $80,750 in overhead costs and 4,750 direct labor hours during the year. Actual direct labor hours were 4,600. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base, and prepare the journal entry for the allocation of overhead.
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