Question
In: Accounting
Explain why factory overhead (FOH) must be assigned to products using a predetermined overhead rate (POHR)...
Explain why factory overhead (FOH) must be assigned to products using a predetermined overhead rate (POHR) while direct material (DM) and direct labor (DL) are traced directly to jobs. Provide the formula to calculate POHR.
Explain the concept of under-applied and over-applied overhead and provide the journal entry to close FOH if it is under-applied (debit balance)..
Explain how direct material flows through the different accounts until it is sold..
Solutions
ekkarill92 answered 1 year agoRelated Solutions
What are the manufacturing overhead costs? Assigned costs to products using a predetermined overhead rate using...
What are the manufacturing overhead costs?
Assigned costs to products using a predetermined overhead
rate using a standard costing system, as discussed, job costing,
and manufacturing activity-based costing.
Assume manufacturing overhead costs are often called
overhead costs applied to products going through the
Assembly department.
The journal entry reflect manufacturing overhead costs applied
to products going through the Finishing department is as
follows:
Transferred-In Costs
The costs associated with manufacturing should transfer from the
work-in-process inventory account for the production...
Explain what a predetermined overhead rate is, how it is calculated, and why it is used.
Explain what a predetermined overhead rate is, how it is
calculated, and why it is used.
Explain why the Factory Overhead Balance must be disposed of at year end?
Explain why the Factory Overhead Balance must be disposed of at
year end?
Predetermined Overhead Rate, Applied Overhead, Unit Cost Ripley, Inc., costs products using a normal costing system....
Predetermined Overhead Rate, Applied Overhead, Unit Cost
Ripley, Inc., costs products using a normal costing system. The
following data are available for last year:
Budgeted:
Overhead
$343,000
Machine hours
88,000
Direct labor hours
9,800
Actual:
Overhead
$342,200
Machine hours
85,800
Direct labor hours
9,580
Prime cost
$1,464,700
Number of units
180,000
Overhead is applied on the basis of direct labor hours.
Required:
1. What was the predetermined overhead
rate?
$fill in the...
This exercise will deal with the costing of a product using a predetermined overhead rate and...
This exercise will deal with the costing of a product using a
predetermined overhead rate and Activity Based Costing (ABC).
Please note the different results from using the different
methods.
The Sample Company wants to compare the results from the use of
a predetermined overhead rate versus Activity Based Costing (ABC).
The following are the estimated costs:
Estimated Manufacturing Overhead
$ 1,000,000.00
Estimated direct labor hours (DLH)
40000
Predetermined Overhead Rate
$ 25.00
per DLH
Mono-Relay
Bi-Relay
Time to Make...
This exercise will deal with the costing of a product using a predetermined overhead rate and...
This exercise will deal with the costing of a product using a
predetermined overhead rate and Activity Based Costing (ABC).
Please note the different results from using the different
methods.
The Sample Company wants to compare the results from the use of
a predetermined overhead rate versus Activity Based Costing (ABC).
The following are the estimated costs:
Estimated Manufacturing Overhead
$ 1,000,000.00
Estimated direct labor hours (DLH)
40000
Predetermined Overhead Rate
$ 25.00
per DLH
Mono-Relay
Bi-Relay
Time to Make...
This exercise will deal with the costing of a product using a predetermined overhead rate and...
This exercise will deal with the costing of a product using a
predetermined overhead rate and Activity Based Costing (ABC).
Please note the different results from using the different
methods.
The Sample Company wants to compare the results from the use of
a predetermined overhead rate versus Activity Based Costing (ABC).
The following are the estimated costs:
Estimated manufacturing overhead
$1,000,000.00
Estimated direct labor hours (DLH)
40,000
Predetermined overhead rate (per DLH)
$25.00
Mono-Relay
Bi-Relay
Time to make one unit...
1.In the predetermined factory overhead rate the budgeted activity units used in the denominator or formula...
1.In the predetermined factory overhead rate the budgeted
activity units used in the denominator or formula known as cost
driver are measured in all the following except: Select one: a.
direct labor hours b. machine hours c. direct labor costs d.
indirect labor costs e. production units
2.Activity-based costs include the following steps except:
Select one: a. identify activities that consume resources b.
identify the cost drivers associated with each activity or activity
pool c. calculate an applied rate for...
Predetermined Overhead Rate, Overhead Variances, Journal Entries Craig Company uses a predetermined overhead rate to assign...
Predetermined Overhead Rate, Overhead Variances, Journal
Entries
Craig Company uses a predetermined overhead rate to assign
overhead to jobs. Because Craig's production is machine intensive,
overhead is applied on the basis of machine hours. The expected
overhead for the year was $6,461,400, and the practical level of
activity is 363,000 machine hours.
During the year, Craig used 369,500 machine
hours and incurred actual overhead costs of $6,502,100. Craig also
had the following balances of applied overhead in its accounts:
Work-in-process...
1. Why is a predetermined overhead rate useful in "applying" overhead costs in a manufacturing environment?...
1. Why is a predetermined overhead rate useful in "applying"
overhead costs in a manufacturing environment? Can you think of any
"downside" of using a predetermined overhead to apply/allocate
overhead costs to jobs/departments?
http://en.wikipedia.org/wiki/Pre-determined_overhead_rate (Links
to an external site.)
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