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Determine and Use Overhead Rate The following selected ledger accounts of Cameron Company are for February...

Determine and Use Overhead Rate

The following selected ledger accounts of Cameron Company are for February (the second month of its accounting year):

Materials Inventory
Feb. 1 balance 81,900 February credits 293,800
February debits 270,400
Manufacturing Overhead
February debits 356,720 Feb. 1 balance 30,160
February credits 354,510
Work in Process Inventory
Feb. 1 balance 58,240 February credits 897,000
February debits:
Direct material 274,000
Direct Labor 393,900
Man. overhead 354,510
Wages Payable
February debits 503,100 Feb. 1 balance 117,000
February credits 460,200
Finished Goods Inventory
Feb. 1 balance 198,900 February credits 997,620
February debits 897,000

a. Determine the amount of indirect material requisitioned for production during February.

$Answer

b. How much indirect labor cost was apparently incurred during February?

$Answer

c. Calculate the manufacturing overhead rate based on direct labor cost.

Answer%

d. Was manufacturing overhead for February under- or overapplied, and by what amount?

Manufacturing overhead was Answerover-appliedunder-applied by $Answer for February.

e. Was manufacturing overhead for the first two months of the year under- or overapplied, and by what amount?

Manufacturing overhead was Answerover-appliedunder-applied by $Answer for the first two months.

f. What is the cost of production completed in February?

$Answer

g. What is the cost of goods sold in February?

$Answer

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Expert Solution

  • a Total materials requisitioned for production 293,800 (February Credits in Materials Inventory Account)
    Direct Materials requisitioned 274,000 (February Debit in Work in Process Inventory)
    INDIRECT MATERIALS REQUSITIONED 19,800 (293,800-274,000)
    b Total Wages in February 460,200 (February Credits in Wages Payable Account)
    Direct Labor 393,900 (February Debit in Work in Process Inventory)
    INDIRECT LABOR COST INCURRED IN FEBRUARY 66,300 (460,200-393,900)
    c Total Manufacturing Overhead in February 356,720
    Direct Labor Cost 393,900
    MANUFACTURING OVERHEAD RATE BASED ON DIRECT LABOR COST 0.90 (356,720/393,900)
    d Total Manufacturing Overhead incurred in February 163350
    Total Manufacturing Overhead Applied in February 166650
    MANUFACTURING OVERHEAD WAS UNDERAPPLIED BY -2210 354510-356,720)
    e MANUFACTURING OVERHEAD WAS UNDER APPLIED In February -2210
    MANUFACTURING OVERHEAD WAS OVERAPPLIED In January 30160
    MANUFACTURING OVERHEAD FOR THE First TWO MONTHS BY 27,950 (0verapplied in first month $ 30160- Manufacturing overhead incurred in feb $356,720 + manufacturing overhead applied $354510 = $27,950
    f Cost of Production completed in February 897,000 (February Credit in Work in Process Inventory= February Debits in Finished Goods Inventory)
    g Cost of goods sold in February 997,620 (February Credit in Finished Goods Inventory)
    Comment

ekkarill92 answered 2 years ago
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