A corporation uses a job costing accounting system for its production costs. A p

Question

A corporation uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labour hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows 50,000 $350,000 216,000 60,000 Direct hours Variable overhe costs Fixed overhea costs Total overhead 490,000 216,000 $706,000 240,000 216,000 The expected volume is 60,000 direct labour hours for the entire year. The following information is for November, when Jobs 50 and 51 were completed.

Explanation / Answer

Answer 20a -D. $10.60 per DLH Predetermined Overhead Rate = $636,000 (total Overhead) / 60,000 DLH Predetermined Overhead Rate = $10.60 per DLH Answer 20b - C. $158,500 Job-50 Beginning Balance      54,000.00 Direct Material      45,000.00 Direct Labor - 3,500 DLH X $8      28,000.00 Factory Overhead Applied - 3,500 DLH X $9      31,500.00 Total    158,500.00 Answer 20c - A. $18,000 Job-52 Factory Overhead Cost Applied - 2,000 DLH X $9      18,000.00 Answer 20d - B. $76,500 Total Factory Overhead Cost Applied - 8,500 DLH X $9      76,500.00 Answer 20e - D. $73,500 Actual Factory Overhead: Factory Maintenance        6,500.00 Factory Depreciation        2,500.00 Factory Power & Lighting        4,000.00 Factory Repairs        1,500.00 Indirect Labor Wages      17,000.00 Supervisory Salaries      36,000.00 Supplies        6,000.00 Total Actual Factory Overhead      73,500.00 Answer 20f - E. credit it to Cost of Goods Sold in the Income Statement Journal Entry to be passed - Factory Overhead Overapplied: Particulars Dr. Amt. Cr. Amt. Factory Overhead        1,000.00    Cost of Goods Sold    1,000.00

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