Problem#1 Sikarnie Corporation uses a job-order normal costing system with two d

Question

Problem#1 Sikarnie Corporation uses a job-order normal costing system with two direct cost categories (direct materials and direct labor) and one indirect cost pool. Sikarnie has provided the following information: Budget for 2017 Actual results for 2017 $783,000 2,844,000 Direct material costs Direct labor costs Indirect costs Machine hours Direct labor hours $861,000 2.700,000 1,496,500 33,500 95,000 1.586,300 138,600 103,000 In addition, data on account balances at the end of 2017 and the amount of actual machine hours within each account at the end of 2017 is as follows (all data provided is before proration): 2017 Year-end $541,100 $231,900 Actual machine hours 41,580 34,650 62,370 balance Work-in-Process (WIP) Control Finished Goods (FG) Control Cost of Goods Sold (COGS) Required (show all work) (a) Assume that Sikarnie allocates indirect costs using machine hours. Calculate the budgeted indirect cost rate for the year 2017. Calculate the total allocated indirect costs for the year 2017.

Explanation / Answer

(a)

1.

Working:

(a) 2.

Working:

b.

Working:

b.

(i)

Working:

(ii)

Working:

(iii) Indirect costs are over-applied.

Working:

Budgeted indirect cost rate         11.21 per machine hour

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.