Accounting 210 Chapter 2
Solve for COGS and Gross Profit: Padres company has Finished goods inventory of 60,000 Janurary 1st and 150,000 Dec 31. Cost of goods manufactured for the year is 2,100,000 and annual sales were 2,750,000.
60,000 (beg finished goods inv)+2,100,000 (COGM)= 2,160,000 2,160,000- 150,000 ( end finished goods inv)= $2,010,000( costs of goods sold) 2,750000 (annual sales)-2,010,000 (COGS)=740,000( gross profit)
Solve for Overhead rate per machine hour:Marquis Company estimates that annual manufacturing overhead costs will be $841,000. Estimated annual operating activity bases are direct labor cost $491,000, direct labor hours 43,000, and machine hours 105,700.
841,000/ 105,700= 7.9564= $7.96
Solve for Overhead Rate Per direct labor hour: Marquis Company estimates that annual manufacturing overhead costs will be $841,000. Estimated annual operating activity bases are direct labor cost $491,000, direct labor hours 43,000, and machine hours 105,700.
841,000/43,000=19.558=$19.56
Solve for Overhead rate per direct labor cost: Marquis Company estimates that annual manufacturing overhead costs will be $841,000. Estimated annual operating activity bases are direct labor cost $491,000, direct labor hours 43,000, and machine hours 105,700.
841,000/491,000=1.7128 1.7128*100= 171.28%
For Eckstein Company, the predetermined overhead rate is 130% of direct labor cost. During the month, Eckstein incurred $103,200 of factory labor costs, of which $86,420 is direct labor and $16,780 is indirect labor. Actual overhead incurred was $116,934. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or overapplied manufacturing overhead.
86,420(direct labor)*1.30(PDOHR)= 112,346 (OH applied) Actual Overhead = 116,934 Underapplied the overhead 116,934(actual OH)-112,346(Oh applied)= 4,588 Underapplied by 4,588
LOOK AT ACTIVITY 2 NUMBER 3
ACT 2 #3
Compute predetermined Overhead rate and the compute the total cost of Job A45: White Sox, Inc allocates overhead per direct labor hour. Job A45 required 4 units of direct materials at a cost of $30 per unit and took employees 15 hours to complete. Employees earn $15 per hour. Total Estimated Overhead is 126,000 with a total of $14,000 estimated direct labor hours.
PDOHR: 126,000 (estimated overhead)/ 14,000 (Direct labor hours)= 9 Total Cost: 4*30= 120 (direct materials) 15*15= 225(direct labor) 15*9= 135 (MOH) 120+225+135= $480 (total cost of job)
