Question

In: Accounting

Tinkle-Tinkle Glass Company makes glass globe paper weights for desks. The company uses a job-order cost...


Tinkle-Tinkle Glass Company makes glass globe paper weights for desks. The company uses a job-order cost system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Fabrication Department is based on machine hours, and the rate in the Finishing Department is based on direct labor hours. At the beginning of the year, the company’s management made the following estimates for the year:

                                                                                                            Department

                                                                                                Fabrication       Finishing

Machine hours                                                                         83,000            28,000

Direct labor hours                                                                     30,000            43,000

Direct material cost                                                                 $412,000            $213,000

Direct labor cost                                                                      $299,000            $692,000

Fixed manufacturing overhead cost                                            $799,000           $279,000

Variable manufacturing overhead per machine hour                       $2.05                    --

Variable manufacturing overhead per direct labor hour                       --                  $2.00

Job 25 (the Christmas holiday special) was started on August 1 and completed on August 31. The company’s cost records show the following information concerning the job:

                                                                                                            Department     

                                                                                                Fabrication       Finishing

Machine hours                                                                                  315                   80

Direct labor hours                                                                              105                 125

Direct materials cost                                                                      $1,305          $1,030

Direct labor cost                                                                                $880              1,085

Compute the predetermined overhead rate used during the year in the Fabrication Department. (Round to two decimal places.) Do the same for the Finishing Department. (Round to two decimal places.) Be careful to use the proper cost driver.

Compute the total overhead cost applied to Job 25 (in dollars and cents).

What would be the total cost recorded for Job 25? If Job 25 contained 50 units, what would be the unit product cost? If it contained 800 units, what would be the unit product cost? (Round to two decimal places.)

At the end of the year, the records of Tinkle-Tinkle Glass revealed the following actual cost and

operating data for all jobs during the year:

                                                                                                            Department

                                                                                                Fabrication       Finishing

Machines hours                                                                           87,000               31,000

Direct labor hours                                                                        32,000               30,000

Direct materials cost                                                                 $424,000           $160,000

Manufacturing overhead cost                                                    $712,000           $287,000         

What was the amount of actual overhead in each department at the end of the year? Was it underapplied or overapplied? (You should have a total of four answers for this question.)

Solutions

Expert Solution

1) Compute the predetermined overhead rate used during the year in the Fabrication Department. (Round to two decimal places.) Do the same for the Finishing Department. (Round to two decimal places.) Be careful to use the proper cost driver.

Fabricating department = 799000/83000+2.05 = $11.68 per machine hour

Finishing department = 279000/43000+2 = $8.49 per labour hour

2) Compute the total overhead cost applied to Job 25 (in dollars and cents).

Overhead applied = 315*11.68+125*8.49 = 4740.45

3) What would be the total cost recorded for Job 25? If Job 25 contained 50 units, what would be the unit product cost? If it contained 800 units, what would be the unit product cost? (Round to two decimal places.)

Total Job Cost = 1305+1030+880+1085+4740.45 = 9040.45

Unit Cost at 50 Units = 9040.45/50 = $180.81 per unit

Unit Cost at 800 Units = 9040.45/800 = $11.30 per unit

4) What was the amount of actual overhead in each department at the end of the year? Was it underapplied or overapplied? (You should have a total of four answers for this question.)

Actual overhead fabrication = 712000

Actual overhead finishing = 287000

Fabrication = (87000*11.68)-712000 = 304160 Overapplied

Finishing = (30000*8.49)-287000 = 32300 Underapplied

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Tinkle-Tinkle Glass Company makes glass globe paper weights for desks. The company uses a job-order cost...
Tinkle-Tinkle Glass Company makes glass globe paper weights for desks. The company uses a job-order cost system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Fabrication Department is based on machine hours, and the rate in the Finishing Department is based on direct labor hours. At the beginning of the year, the company’s management made the following estimates for the year:                                                                                                             Department                                                                                                 Fabrication       Finishing Machine hours                                                                         84,000                       27,000 Direct...
C. Shattered Glass Company makes custom order ornate glass vases. The company uses a job-order cost...
C. Shattered Glass Company makes custom order ornate glass vases. The company uses a job-order cost system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Fabrication Department is based on machine hours, and the rate in the Finishing Department is based on direct labor hours. At the beginning of the year, the company’s management made the following estimates for the year: Department Fabrication Finishing Machine hours 79,000 25,000 Direct labor hours...
Glass Company makes glass orders based on the customer specifications, so the company uses job costing...
Glass Company makes glass orders based on the customer specifications, so the company uses job costing to track costs. 1. The company uses direct labor hours as the cost driver for manufacturing overhead application. The company estimated the following manufacturing overhead costs for the year:   $600,000 The company estimated the following usage of direct-labor hours for the year: 200,000 2. Beginning Work-in-process, March 1 (Job 57) $108,000 3. Beginning Finished Goods, March 1 (Job 55) $125,000 2. Labor Information for...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $591,670. Materials requisitioned, $497,000, of which $64,610 was for general factory use. Factory labor used, $609,420, of which $115,790 was indirect. Other costs incurred on account for factory overhead, $142,000; selling expenses, $218,920; and administrative expenses, $130,170. Prepaid expenses expired for factory overhead were $27,220; for selling...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $820,330. Materials requisitioned, $689,080, of which $89,580 was for general factory use. Factory labor used, $844,940, of which $160,540 was indirect. Other costs incurred on account for factory overhead, $196,880; selling expenses, $303,520; and administrative expenses, $180,470. Prepaid expenses expired for factory overhead were $37,740; for selling...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $738,430. Materials requisitioned, $620,280, of which $80,640 was for general factory use. Factory labor used, $760,580, of which $144,510 was indirect. Other costs incurred on account for factory overhead, $177,220; selling expenses, $273,220; and administrative expenses, $162,450. Prepaid expenses expired for factory overhead were $33,970; for selling...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $492,950. Materials requisitioned, $414,080, of which $53,830 was for general factory use. Factory labor used, $507,740, of which $96,470 was indirect. Other costs incurred on account for factory overhead, $118,310; selling expenses, $182,390; and administrative expenses, $108,450. Prepaid expenses expired for factory overhead were $22,680; for selling...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order...
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $770,000. Materials requisitioned, $680,000, of which $75,800 was for general factory use. Factory labor used, $756,000, of which $182,000 was indirect. Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600. Prepaid expenses expired for factory overhead, $24,500; for selling expenses,...
Prepare entries in a job order cost system and job cost sheets. Lott Company uses a...
Prepare entries in a job order cost system and job cost sheets. Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job 49 had been completed at a cost of...
Entries for Costs in a Job Order Cost System Velasco Co. uses a job order cost...
Entries for Costs in a Job Order Cost System Velasco Co. uses a job order cost system. The following data summarize the operations related to production for July: Materials purchased on account, $695,900 Materials requisitioned, $584,560, of which $75,990 was for general factory use Factory labor used, $716,780, of which $136,190 was indirect Other costs incurred on account for factory overhead, $167,020; selling expenses, $257,480; and administrative expenses, $153,100 Prepaid expenses expired for factory overhead, $32,010; for selling expenses, $27,140;...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT