Question

1. Bonita Company produces earbuds. During the year, manufacturing overhead costs are estimated to be $216,000. Estimated machine usage is 2,500 hours. The company assigns overhead based on machine hours. Job No. 551 used 90 machine hours.

(a1)

Compute the predetermined overhead rate. (Round answer to 2 decimal places, e.g. 5.25.)

Predetermined overhead rate

$enter the predetermined overhead rate in dollars rounded to 2 decimal places

2. Whispering Winds Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2022, accounting records for Whispering Winds Inc. contain the following data.

Raw Materials Inventory		$4,100		Manufacturing Overhead Applied		$33,800
Work in Process Inventory		5,675		Manufacturing Overhead Incurred		28,600

Subsidiary data for Work in Process Inventory on June 1 are as follows.

Job Cost Sheets
		Customer Job
Cost Element		Rodgers		Stevens		Linton
Direct materials		$600		$900		$800
Direct labor		200		600		700
Manufacturing overhead		250		750		875
		$1,050		$2,250		$2,375

During June, raw materials purchased on account were $4,700, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $800 and miscellaneous costs of $300 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Customer Job		Materials Requisition Slips				Time Tickets
Rodgers			$900				$800
Koss			1,800				800
Stevens			400				400
Linton			1,300				1,300
Rodgers			300				400
			4,700				3,700
General use			1,400				1,400
			$6,100				$5,100

Overhead was charged to jobs at the rate of $1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold. Each customer paid in full.

(a) Record the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter 0 for amounts.)

Answer 1

Solution-

1)-Predetermined Overhead rate = Total Manufacturing Overhead / Direct Labor Hours
Predetermined Overhead rate = 216,000 / 2,500
Predetermined Overhead rate = $86.40 per DLH

Solution-

2)-

Date	Account	Debit	credit
1a	Raw material inventory	$4,700
	Accounts payable		$4,700
	[raw material purchased on account]
b	Factory labor	$5,100
	cash		$5,100
c	Manufacturing overhead	$1,100
	Accumulated depreciation		$800
	Accounts payable		$300
	[Manufacturing overhead incurred]
2	work in process	$4,700
	manufacturing overhead	$1,400
	Raw material inventory		$6,100
b	work in process	$3,700
	manufacturing overhead	$1,400
	Factory labor		$5,100
c	work in process	$4,625
	manufacturing overhead		$4,625
	[Overhead applied 3700*1.25]
3	cash
	sales revenue
b	cost of goods sold	15100
	Finished goods inventory		15100

cost of goods sold

	Beginning	Direct material	labor	overhead	Total
Rodgers	1050	900+300=1200	800+400=1200	1200*1.25=1500	4950
stevens	2,250	400	400	400*1.25=500	3550
linton	2,375	1300	1300	1300*1.25=1625	6600
					15100