of architectural labor time. The actual architectural labor time spent on the wa

Question

of architectural labor time. The actual architectural labor time spent on the was 250 hours. Compute the cost of the champ Tower sketches using actual costing, normal costing, and the variation from normal costing that uses budgets rates for direct costs. proportion of overhead. The Ride-On-Wave Company(ROW) produces a line of non-motorized boats ROW uses a normal costing system and allocates manufacturing overhead using direct manufacturing labour cost. The following data are for 2011: Inventory balances on December 31, 2011, were as follows: Calculate the manufacturing overhead allocation rate. Compute the amount of under- or overallocated manufacturing overhead. Calculate the coding balances in work in process, finished goods, and cost of sold of under-overallocated manufacturing overhead is as follows: Written off to cost of goods sold Prorated based on ending balances (before proration) in each of the three accounts Prorated based on the overhead allocated in 2011 in the ending balances (before proration) in each of the three accounts Which method makes the most sense? Justify your answer.

Explanation / Answer

pls rate

1 Budgeted labor cost (b) 250000 Budgeted manufacturing overhead cost (a) 125000 Manufacturing overhead allocated rate (a/b) 50% 2 Labor cost actual (a) 228000 Manufacturing overhead applied (a*50%) =b 114000 Actual manufactruing overhead incurred c 117000 Under allocated ( c -b) 3000 Labor cost actual Manufacturing cost applied Total cost Actual cost Over /(under) applied 3 (a) Work in process 20520 10260 30780 50700        (19,920) Finished goods 59280 29640 88920 245050       (156,130) Cost of goods sold 148200 74100 222300 49250        173,050 342000 345000 Cost incurred = labor cost + material cost

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