Question

Problem 20-1A (Part Level Submission) Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 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 No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $90,000 on account. 2. Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $12,000; and various other manufacturing overhead costs on account $16,000. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,000 $5,000 51 39,000 25,000 52 30,000 20,000 Collapse question part (a) Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. (Round answer to the nearest whole percent, e.g. 25%.) Predetermined overhead rate % SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER Expand question part (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (c) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (d) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (e) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (f) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (g) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (h) The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

predetermined overhead rate
Estimated manufacturing overhead/total estimated direct labor costs
840,000/700000
120.00%
job no 50
Date		Direct	direct	MOH
		materials	labor
beg.		20,000	12,000	16,000
Jan		10,000	5,000	6,000
		30,000	17,000	22,000
cost of completed job
Direct materials				30,000
direct labor				17,000
MOH				22,000
total cost				69,000
job no 51
Date		Direct	direct	MOH
		materials	labor
Jan		39,000	25,000	30,000
		39,000	25,000	30,000
cost of completed job
Direct materials				39,000
direct labor				25,000
MOH				30000
total cost				94,000
Job 52
Date		Direct	direct	MOH
		materials	labor
Jan		30,000	20,000	24,000
No	Account titles & Explanations				Debit	Credit
1)	Raw materials inventory				90,000
	Accounts payable					90,000
2)	Factory labor				70,000
	Factory wages payable					54,000
	employer payroll taxes payable					16,000
3)	manufacturing overhead				65,000
	raw materials inventory					17,000
	Factory labor					20,000
	Accumulated depreciation					12,000
	Accounts payable					16,000
No	Account titles & Explanations				Debit	Credit
1)	Work in process inventory				79,000
	Raw materials inventory					79,000
2)	work in process inventory				50,000
	Factory labor					53,000
3)	Work in process inventory				60000
	manufacturing overhead					60,000
	Account titles & Explanations				Debit	Credit
	finished goods inventory				163,000
	work in process inventory					163,000
	(job 50 +job 51 =
No	Account titles & Explanations				Debit	Credit
	Accounts receivable				280000
	sales					280,000
	cost of goods sold
	finished goods inventory				159,000
	(job 49+job 50)					159,000
finished goods inventory			94,000	Job No 51
			finished goods inventory
	opening		90,000	COGS		159,000
	WIP		163,000
	end bal		94,000
manufacturing overhead			5,000	under applied
		manufacturing overhead
	Actual		65,000	Applied		60,000
	bal		5,000