Ravsten Company uses a job-order costing system. y applies overhead cost to jobs

Question

Ravsten Company uses a job-order costing system. y applies overhead cost to jobs on the basis of machine-hours. For the current year, the cost. The following transactions occurred during the year company estimated that it would work 31,000 machine-hours and incur $156,550 in manufacturing a. R aw materials requisitioned for usein production $305,000 (80% direct and 20% indirect b. The following costs were incurred for employee services: Direct labor Indirect labor Sales commissions Administrative salaries 176,000 $ 34,000 $ 26,000 S 41,000 c. Heat, power, and water costs incurred in the factory, $70,000 d. Insurance costs, $26,000 (90% relates to factory operations, and 10% relates to selling and administrative activities). e. Advertising costs incurred, $66,000, f Depreciation recorded for the year, $76,000 (85% relates to factory operations, and 15% relates to selling and administrative activities) g. The company used 56,000 machine-hours during the year h. Goods that cost $496,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. i. Sales for the year totaled $732,000. The total cost to manufacture these goods according to their job cost sheets was $491,000 Required 1. Determine the underapplied or overapplied overhead for the year. (Round predetermined overhead rate to 2 decimal places.) so,… 3 /1 000 atul

Explanation / Answer

A Overhead applied OH recovery rate = Estimated OH/ Estimated labor hours =156550/31000 5.05 Per Labor hour OH applied = Actual machine hours* OH recovery rate =56000*5.05 282,800 B Overhead incurred: Particulars Amount Amount Indirect rawmaterials =305000*20% 61000 Indirect labor 34000 Factory depreciation =76000*85% 64600 Hear, power, water 70000 Factory insurance =26000*90% 23400 Overhead applied 253000 C As OH applied is more than OH incurred, OH is over applied (under) applied OH =282800-253000 29,800

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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