Question

In: Accounting

The work in process inventory account of a manufacturing company that uses and overhead rate based...

The work in process inventory account of a manufacturing company that uses and overhead rate based on direct labor cost has a $9,873 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $3,300 and direct labor cost of $2,100. Therefore, the company's overhead application rate is:

A. 64% of direct labor cost

B. 136% of direct labor cost

c. 157% of direct labor cost

D. 213% of direct labor cost

E. 47% of direct labor cost

Solutions

Expert Solution

Answer: Option (D) is correct

Explanation:

Manufacturing overhead allocated to work in process = Total cost of Work in Process - Direct material cost - Direct labor cost

                                                                              = $9,873 - $3,300 - $2,100

                                                                              = $4,473

Therefore,

Overhead application rate = (Manufacturing overhead allocated to work in process / Direct labor cost) * 100%

                                        = ($4,473 / $2,100) * 100

                                       = 213%

ekkarill92 answered 3 months ago
Next > < Previous

Related Solutions

6/ The Work in Process Inventory account of a manufacturing company that uses an overhead rate...
6/ The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,050 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $1,910 and direct labor cost of $730. Therefore, the amount of the applied overhead is: Multiple Choice $2,140. $2,640. $1,410. $730. $3,320. 7/ Adams Manufacturing allocates overhead to production on the basis of direct...
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the...
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2018, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # 401. Job stats...
Stardust Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing...
Stardust Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 57 000 actual direct labour hours and incurred R345 000 of actual manufacturing overhead cost. The company had estimated that it would work 55 000 direct labour hours during the year and incur R330 000 of manufacturing overhead cost. The company's manufacturing overhead cost for the year was: (2 ) a. overapplied by R15 000. b....
Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to work-in-process on the...
Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to work-in-process on the basis of machine hours. On January 1 of the current year, there were no balances in work-in-process or finished-goods inventories. The following estimates were included in the current year’s budget.      Total budgeted manufacturing overhead $ 282,000 Total budgeted machine hours 47,000 During January, the firm began the following production jobs: A79: 1,000 machine hours N08: 2,500 machine hours P82: 500 machine hours Prepare...
1. Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on...
1. Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 85,000 and estimated factory overhead is $595,000. The following information is for September of the current year. Job A was completed during September, and Job B was started but not finished.      September 1, inventories   Materials inventory $ 7,600    Work-in-process inventory (All Job A) 31,400...
Work in Process Wages Manufacturing Finished Goods Raw Materials Inventory Payable Overhead Inventory Inventory 28,500 124,500...
Work in Process Wages Manufacturing Finished Goods Raw Materials Inventory Payable Overhead Inventory Inventory 28,500 124,500 73,000 73,000 4,500 43,000 124,500 113,500 57,000 33,000 65,000 8,000 43,000 Balance 0 40,500 Unique produces screens for use in various smartphones. The company reports the following information at December 31. Unique began operations on January 31 earlier that same year. 1. What is the cost of direct materials​ used? 2. What is the cost of indirect materials​ used? 3. What is the cost...
Young's Manufacturing Plant uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based...
Young's Manufacturing Plant uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on machine hours required. At the beginning of 2018, the company expected to incur the following: Manufacturing overhead costs $840,000 Direct labor costs $1,480,000 Machine hours 70,000 hours At the end of 2018, the company actually incurred: Direct labor costs $1,230,000 Depreciation on manufacturing equipment $620,000 Property taxes on plant $35,500 Sales salaries $26,000 Delivery drivers' wages $22,500 Plant janitor's wages $17,000 Machine hours...
Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to...
Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials................................... $6,000 Direct labor......................................... $20,000 Rent on factory building...................... $15,000 Sales salaries..................................... $25,000 Depreciation on factory equipment...... $8,000 Indirect labor....................................... $12,000 Production supervisor's salary............. $15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $2.50 per direct labor-hour...
Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to...
Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials $ 6,000 Direct labor $ 20,000 Rent on factory building $ 15,000 Sales salaries $ 25,000 Depreciation on factory equipment $ 8,000 Indirect labor $ 12,000 Production supervisor's salary $ 15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour...
The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed...
The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory. Work in Process Inventory Beginning WIP 5,200 Direct materials 47,800 Direct labor 30,300 Applied Overhead 16,500 Total Manufacturing Costs 99,800 To Finished Goods ? Ending WIP 10,300 The cost of units transferred to finished goods is: 17-Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Direct Materials Conversion Units Completed and...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT