Tyler Tooling Company uses a job order cost at $253,600 and total and machine ho
ID: 2552586 • Letter: T
Question
Tyler Tooling Company uses a job order cost at $253,600 and total and machine hours for each job cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estmated ts total manufacturing overt machine hours at 63,400 During the first month of operations, the company worked on three jobs and recorded the following actial drect materals cost, direct lator cost Direct materials used Direct labor Machine hours 11,700 $ 16,600 $ 8.000 S 5,400 S 5,400 5,600 S 25,100 27,600 1400 hours 2,500 hours 500 hours 4,400 hours Job 101 was completed and sold for $50,400 Job 102 was completed but not sold Job 103 is still in process Actual overhead costs recorded during the first month of operations totaled $16,100 Required: 1. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) per Hour your intermediate calculations to 2 decimal places J to the Work in Process Iinventory account during the first month of operations, (Roun the 2. Compute the total manufacturing overhead applied 3. Compute the balance in the Work in Process Inventory account at the end of the first month (Round your intermediate caiculations to 2 decimai places.) O Type here to searchExplanation / Answer
SOLUTION
(1) Predetermined overhead rate = Estimated Total Manufacturing Overhead Cost / Estimated Units in the Allocation Base
= $253,600 / 63,400
= $4 per machine hour
(2) Amount applied = Predetermined overhead rate * Actual amount of allocation based used
= $4 * 4,400 hours
= $17,600
(3) Job 103 was the only unfinished job at the end of the first month. The costs associated with the job were-
(4) Only Job 101 was completed and sold during the period. The cost of job 101 was-
The gross profit before the adjustment for over or underapplied manufacturing is:
(5a) Balance in manufacturing overhead = Actual overhead - Applied overhead
= $16,100 - $17,600
= $1,500
(5b) Manufacturing Overhead is overapplied because the actual amount is less than the amount applied.
Amount ($) Direct materials 5,400 Direct labor 5,600 Manufacturing Overhead ($4 *500 hours) 2,000 Total Work in process cost 13,000Related Questions
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