Fabrication Plant suffered a fire incident in August, Ihse for the year were des
ID: 2598590 • Letter: F
Question
Fabrication Plant suffered a fire incident in August, Ihse for the year were destroyed. The following accounting and most of the data for the year were manufacturing overhead estimated at the beginning of otal e vear otal direct labor costs estimated sion at the beginning of the otal direct labor hou $186,000 rs estimated at the beginning of the 3400 direct labor hours manufacturing overhead costs for the year direct labor costs for the year $99,37 $150,0X 2000 direct labe hou ctual direct labor hours for the year The company hours. bases its manufacturing overhead allocation on the number of direct labor What was the predetermined overhead allocation rate for the answer to the nearest cent.) year? (Round your a. b. How much overhead was allocated during the year? c. How much was overhead over or under applied? d. What adjustment would you make to Cost of Goods Sold?Explanation / Answer
A. Predetermined Overhead rate = Direct Labour costs estimated/ Direct Labour Hrs in the beginning
I.e 186000/3400=$ 54.71/hr ($ 55/hr approx.)
B. Overhead allocated for 2000 labour hours is
Manufacturing Overhead =101820/3400*2000= 59894
Direct Labour costs =186000/3400*2000= 109412
C. Overapplied/(underapplied) = Actual during the year - Total of B.
=$249370-$169305 =$80065
D. Cost of goods sold will be inflated by $80065 as the costs actually incurred are over the predetermined costs
E. Collections
Feb: 25% of 600000(sales of feb)
Plus : 50% of 375000( credit sale of Jan)
Plus: 50% of 450000( credit sale of feb)
= 562500
MARCH: 25% of 800000( sale of march)
Plus: 50% of 450000( credit sale of feb)
Plus: 50% of 600000( credit sale of march)
= 7250000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.