21 The following accounts are from last year\'s accounting record SH Manufacturi

Question

21 The following accounts are from last year's accounting record SH Manufacturing Raw Materials FG Bal 0(b) 37,000 Ba a) 75,000 WIP 0 51,000 Bal 0 g) 44,000 51,000 b) 15,000 c) 22,000 e) 60,000 COGS b) 22,000e) 60,0009) 44,000 c) 44,000 d) 6,000 They use job-order costing and apply overhead to jobs based on direct labor hours. What is the amount of direct materials used for the year? What is the amount of manufacturing overhead over or under applied for the year? At an activity level of 7,000 units in a month, Z Corporation's total variable maintenance cost is $350,000 and its total fixed maintenance cost is $130,000 What would be the total maintenance cost, both fixed and variable, at an activity level of 7,500 units in a month?

Explanation / Answer

Solution 21:

Amount of direct material used for the year = Debit to WIP in trasaction b = $15,000

Total manufacturing overhead incurred = $22,000 + $44,000 + $6,000 = $72,000

Overhead applied = $60,000

Overhead underapplied = $72,000 - $60,000 = $12,000

Solution 22:

Variable maintenance cost per unit = $350,000 / 7000 = $50 per unit

Fixed maintenance cost = $130,000

Total maintenance cost at activity level of 7500 units = (7500 * $50) + $130,000 = $505,000

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