Question

In: Accounting

Far Play Company uses a job order cost system in each of its three manufacturing departments....

Far Play Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department A, direct labour hours in Department B, and machine hours in Department C.

In establishing the predetermined overhead rates for 2017, the following estimates were made for the year.

	Department
	A	B	C
Manufacturing Overhead	$720,000	$620,000	$910,000
Direct labour Cost	$590,000	$125,000	$620,000
Direct labour Hours	47,500	41,500	40,000
Machine Hours	91,000	107,000	128,500

During January, the job cost sheets showed the following costs and production data.

	Department
	A	B	C
Direct Materials Used	$92,500	$82,000	$66,000
Direct Labour Cost	$54,500	$33,000	$48,500
Manufacturing Overhead Incurred	$63,500	$69,500	$72,500
Direct Labour Hours	3,500	4,400	4,400
Machine Hours	7,250	10,750	14,500

Required:

Calculate the predetermined overhead rate for each department
Calculate the total manufacturing costs assigned to jobs in January in each department.
Calculate the under-or over-applied overhead for each department at January 31st.

Expert Solution

Ans-

Department A = Manufacturing overhead / Direct labor costs

=$720,000 / $590,000

=122%

Department B= Manufacturing overhead / Direct labor hours

=$620,000 /41,500

=$14.94

Department = Manufacturing overhead / Machine hours

$910,000/128,500

=$7.08

___________________________________________________________________________

Total manufacturing costs assigned to jobs in January

Department A =$54,500 * 122/100=$66,490 +$54,500+$92,500=$213,490

Department B=4,400 hours* $14.94 =$65,736+$33,000+$82,000=$180,736

Department C= 14,500*$7.08=$102,660+$48,500+$66,000=$217,160

______________________________________________________________________

Department A=Estimates -Actual

=$213,490 - $210,500 ($92,500 +$54,500+$63,500)

Over applied By $2,990

Department B=Estimates -Actual

$180,736 - $184,500 ($82,000+$33,000+$69,500)

=Under applied by $3,764

Department C =Estimates -Actual

=$217,160 - $187,000($66,000+$48,500+$72,500)

=Over applied by $30,160

ekkarill92 answered 5 months ago

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing...

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $1,080,000 $1,500,000 $1,020,000 Direct labor costs $1,542,857 $1,250,000 $450,000 Direct labor hours 100,000 125,000 40,000...

Blossom Company uses a job order cost system in each of its three manufacturing departments. Manufacturing...

Blossom Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $1,400,000 $1,250,000 $720,000 Direct labor costs $2,000,000 $1,250,000 $450,000 Direct labor hours 100,000 125,000 40,000...

Agassi Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead...

Agassi Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $1,280,000 $1,500,000 $840,000 Direct labour costs $1,600,000 $1,312,500 $472,500 Direct labour hours 105,000 125,000 42,000 Machine...

Elliott Manufacturing uses a job order cost system in each of its three manufacturing departments. Manufacturing...

Elliott Manufacturing uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A, direct labor hours in Department B, and machine hours in Department C. In establishing the predetermined overhead rates for 2010 the following estimates were made for the year Department A B C Manufacturing overhead $780,000 $640,000 $750,000 Direct labor cost $600,000 $100,000 $600,000...

Auto valet Manufacturing uses a job order cost system in each of its three manufacturing departments....

Auto valet Manufacturing uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department A, direct labour hours in Department B and machine hours in Department C. The following estimates were used in establishing the predetermined overhead rates for 2017. Department A B C Manufacturing Overhead $840,000 $902,000 $850,000 Direct Labour Cost $600,000 $100,000 $600,000 Direct Labour Hours 50,000 41,000 50,000 Machine Hours...

Auto valet manufacturing uses a job order cost system in each of its three manufacturing department....

Auto valet manufacturing uses a job order cost system in each of its three manufacturing department. Manufacturing overhead is applied to jobs on the basis of direct labour cost in department A, direct labour hours in department B and machine hours in department C. The following estimates were used in establishing the predetermined overhead rates for 2017: Departments A B C Manufacturing Overhead 840,000 902,000 850,000 Direct Labour Cost 600,000 100,000 600,000 Direct Labour Hours 50,000 41,000 50,000 Machine Hours...

Problem 2A-4A Waterway Company uses a job order cost system in each of its three manufacturing...

Problem 2A-4A Waterway Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $ 1,197,000 $ 1,500,000 $ 720,000 Direct labor costs $ 1,496,250 $ 1,250,000...

P3.36A (LO 4, 6) Agassi Company uses a job-order cost system in each of its three...

P3.36A (LO 4, 6) Agassi Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour hours in Department E, and machine hours in Department K. Calculate predetermined overhead rates, apply overhead, and calculate under- or over-applied overhead. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead...

Reyes Manufacturing Company uses a job order cost system. At the beginning of January, the company...

Reyes Manufacturing Company uses a job order cost system. At the beginning of January, the company had one job in process (Job 201) and one job completed but not yet sold (Job 200). Job 202 was started during January. Other select account balances follow (ignore any accounts that are not listed). During January, the company had the following transactions: (a) Purchased $60,000 worth of materials on account. (b) Recorded materials issued to production as follows: Job Number Total Cost 201...

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on...

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $51,700 and its total manufacturing overhead cost to be $98,230. Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 2. Fill in the missing values in...