Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 2, Problem 10E
Exotic Engine Shop uses a
The average shop direct labor rate is $37.50 per hour.
Determine the predetermined shop overhead rate per direct labor hour.
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Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows:
Engine parts
$712,400
Shop direct labor
520,000
Shop and repair equipment depreciation
31,200
Shop supervisor salaries
86,600
Shop property taxes
15,700
Shop supplies
12,100
Advertising expense
14,200
Administrative office salaries
61,300
Administrative office depreciation expense
7,800
Total costs and expenses
$1,461,300
The average shop direct labor rate is $20.00 per hour.
Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.
Bret's RV Manufacturing uses job order costing to account for it's manufacturing costs. The company estimates total manufacturing overhead costs for the
coming year to be $282,783. The total direct materials costs are estimated to be $784,555. The total direct labor hours are estimated to be 67,670 hours with
direct labor costs estimated at $541,365. What is the Predetermined Overhead rate if the company applies overhead based on direct labor hours?
52.24%
36.04%
O417.89%
23.93%
O4,18%
Road Runner Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows:
Engine parts
$1,067,200
Shop direct labor
779,000
Shop and repair equipment depreciation
72,800
Shop supervisor salaries
202,500
Shop property taxes
36,800
Shop supplies
28,200
Advertising expense
21,300
Administrative office salaries
91,800
Administrative office depreciation expense
11,700
Total costs and expenses
$2,311,300
The average shop direct labor rate is $19 per hour.
Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.$fill in the blank 1 per direct labor hour
Chapter 2 Solutions
Managerial Accounting
Ch. 2 - A. Name two principal types of cost accounting...Ch. 2 - What kind of firm would use a job order cost...Ch. 2 - Which account is used in the job order cost system...Ch. 2 - What document is the source for (A) debiting the...Ch. 2 - What is a job cost sheet?Ch. 2 - Prob. 6DQCh. 2 - Discuss how the predetermined factory overhead...Ch. 2 - A. How is a predetermined factory overhead rate...Ch. 2 - Prob. 9DQCh. 2 - Describe how a job order cost system can be used...
Ch. 2 - Issuance of materials On May 7, Bergan Company...Ch. 2 - Direct labor costs During May, Bergan Company...Ch. 2 - Factory overhead costs During May, Bergan Company...Ch. 2 - Applying factory overhead Bergan Company estimates...Ch. 2 - Job costs At the end of May, Bergan Company had...Ch. 2 - Cost of goods sold Pine Creek Company completed...Ch. 2 - Transactions in a job order cost system Five...Ch. 2 - The following information is available for the...Ch. 2 - Cost of materials issuances under the FIFO method...Ch. 2 - Materials issued are as follows: Journalize the...Ch. 2 - Kingsford Furnishings Company manufactures...Ch. 2 - A summary of the time tickets is as follows:...Ch. 2 - Entry for factory labor costs The weekly time...Ch. 2 - Schumacher Industries Inc. manufactures...Ch. 2 - Eclipse Solar Company operates two factories. The...Ch. 2 - Exotic Engine Shop uses a job order cost system to...Ch. 2 - Predetermined factory overhead rate Poehling...Ch. 2 - The following account appears in the ledger prior...Ch. 2 - Collegiate Publishing Inc. began printing...Ch. 2 - The following events took place for Rushmore...Ch. 2 - Job order cost accounting for a service company...Ch. 2 - Job order cost accounting for a service company...Ch. 2 - Barnes Company uses a job order cost system. The...Ch. 2 - Entries and schedules for unfinished jobs and...Ch. 2 - Job cost sheet Remnant Carpet Company sells and...Ch. 2 - Analyzing manufacturing cost accounts Fire Rock...Ch. 2 - Prob. 5PACh. 2 - Entries for costs in a job order cost system Royal...Ch. 2 - Entries and schedules for unfinished jobs and...Ch. 2 - Job cost sheet Stretch and Trim Carpet Company...Ch. 2 - Analyzing manufacturing cost accounts Clapton...Ch. 2 - Flow of costs and income statement Technology...Ch. 2 - Antolini Enterprises produces mens sports coats...Ch. 2 - Alvarez Manufacturing Inc. is a job shop. The...Ch. 2 - Prob. 3MADCh. 2 - Prob. 4MADCh. 2 - Ethics in Action TAC Industries Inc. sells heavy...Ch. 2 - Prob. 2TIFCh. 2 - Communication Carol Creedence, the plant manager...Ch. 2 - RIRA Company makes attachments such as backhoes...Ch. 2 - Todd Lay just began working as a cost accountant...Ch. 2 - Baldwin Printing Company uses a job order cost...Ch. 2 - John Sheng, a cost accountant at Starlet Company,...Ch. 2 - Lucy Sportswear manufactures a specialty line of...Ch. 2 - Patterson Corporation expects to incur 70,000 of...
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- Please use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: It estimates there will be five orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardPlease use the information from this problem for these calculations. After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Box Springs estimates there will be four orders in the next year, and those jobs will involve: What is the total cost of the jobs?arrow_forwardJob order cost sheets show the following costs assigned to each job: The company assigns overhead at $1.25 for each direct labor dollar spent. What is the total cost for each of the jobs?arrow_forward
- Job order cost sheets show the following costs assigned to each job: The company assigns overhead at twice the direct labor cost. What is the total cost for each job?arrow_forwardGerken Fabrication Inc. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of March: a. Compute the total production cost of each job. b. Prepare the journal entries to charge the costs of materials, labor, and factory overhead to Work in Process. c. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. d. Compute the unit cost of each job. e. Compute the selling price per unit for each job, assuming a mark-on percentage of 50%.arrow_forwardCompute the total job cost for each of the following scenarios: a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled 5,000 and that the direct labor cost totaled 3,200. b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is 10 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, and the number of direct labor hours totaled 250. c. If the machine hour method is used in applying factory overhead and the predetermined rate is 12.50 an hour, what amount should be charged to Job 2010 for factory overhead? Assume that the direct materials used totaled 5,000, the direct labor cost totaled 3,200, the direct labor hours were 250 hours, and the machine hours were 295 hours.arrow_forward
- Channel Products Inc. uses the job order cost system of accounting. The following is a list of the jobs completed during March, showing the charges for materials issued to production and for direct labor. Assume that factory overhead is applied on the basis of direct labor costs and that the predetermined rate is 200%. Required: Compute the amount of overhead to be added to the cost of each job completed during the month. Compute the total cost of each job completed during the month. Compute the total cost of producing all the jobs finished during the month.arrow_forwardHager Inc. applies overhead based on direct labor cost using a job-order costing system. The company provided you with the following information: Estimated manufacturing overhead Estimated direct labor cost $42,000 $24,000 $45,500 $24,800 Actual manufacturing overhead Actual direct labor cost How much is the underapplied overhead?arrow_forwardExotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts $989,100 Shop direct labor 722,000 Shop and repair equipment depreciation 39,800 Shop supervisor salaries 110,800 Shop property taxes 20,100 Shop supplies 15,500 Advertising expense 19,800 Administrative office salaries 85,100 Administrative office depreciation expense 10,900 Total costs and expenses $2,013,100 The average shop direct labor rate is $19.00 per hour. Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent.$fill in the blank 1 per direct labor hourarrow_forward
- In a factory, a team of six maintenance staff are paid a guaranteed weekly wage. Which of the following is the most appropriate cost classification for their wages? Direct labour cost Indirect labour cost Semi-variable cost Variable overhead costarrow_forwardPlease refer to the picture. The following information is available for ADT Company, which produces special-order security products and uses a job order costing system. Overhead is applied using a predetermined overhead rate of 55% of direct labor cost.arrow_forwardStreet Runner Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts $885,000 Shop direct labor 646,000 Shop and repair equipment depreciation 60,400 Shop supervisor salaries 167,900 Shop property taxes 30,500 Shop supplies 23,400 Advertising expense 17,700 Administrative office salaries 76,100 Administrative office depreciation expense 9,700 Total costs and expenses $1,916,700 The average shop direct labor rate is $19 per hour. Determine the predetermined shop overhead rate per direct labor hour. Round the answer to nearest whole cent: $________ per direct labor hourarrow_forward
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