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Problem-1
Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours.
Required:
a. For 2019, the company’s cost accountant estimated that total overhead costs incurred would be $518,700 and that a total of 57,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. (Round your answer to 2 decimal places.)
b. A production run of 200 coffee mugs used raw materials that cost $490 and used 40 direct labor hours at a cost of $10.70 per hour. Calculate the cost of each coffee mug produced. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
c. At the end of October 2019, 150 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 20 19, finished goods inventory. (Do not round intermediate calculations. Round your answers to 2 decimal pieces.)
Problem-2
Nautical Footware Inc. manufactures women’s boating shoes. Manufacturing overhead is assigned to production on a machine-hour basis. For 2019, it was estimated that manufacturing overhead would total $365,930 and that 24,410 machine hours would be used.
Required:
a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2019. (Round your answer to 2 decimal places.)
b. During May, 3,9 00 pairs of shoes were made. Raw materials costing $6,830 were used, and direct labor costs totaled $9,010. A total of 730 machine hours were worked during the month of May. Calculate the cost per pair of shoes made during May. (Do not round intermediate calculations. Round your answer to 2 decimal places)
Problem-3
Checker Inc. produces automobile bumpers_ Overhead is applied on the basis of machine hours required for cutting and fabricating _ A predetermined overhead application rate of $9-40 per machine hour was established for 2019_
Required:
a. If 9,100 machine hours were expected to be used during 2019, how much overhead was expected to be incurred?
b. Actual overhead incurred during 2019 totaled $122,700, and 9,200 machine hours w ere used during 2019 Calculate the amount of over- or underapplied overhead for 2019 (Input the amount positive value.)
c. Whether the overapplied or underapplied overhead for the year is normally transferred to cost of goods sold in the income statement?
Problem-4
Fredrick Paulson Tie Co. manufactures neckties and scarves. Two overhead application bases are used; some overhead is applied on the basis of raw material cost at a rate of 145% of material cost. and the balance of the overhead is applied at the rate of $7.65 per direct labor hour.
Required:
Calculate the cost per unit of a production run of 535 neckties that required raw materials costing $1,720 and 69 direct labor hours at a total cost of $845. (Round your answer to 2 decimal places.)
Problem-5
Wool Creations Inc. manufactures wool sweaters. Costs incurred in making 9.400 sweaters in October included $ 3 6 ,1 90 of fixed manufacturing overhead. The total absorption cost per sweater was $10.35.
Required:
a. Calculate the variable cost per sweater. (Round intermediate calculations and final answer to 2 decimal pieces.)
b. The ending inventory of sweaters was 1,200 units lower at the end of the month than at t he beginning of the month. By how much and in what direction (higher or lower) would cost of goods sold for the month of October be different under variable costing than under absorption costing7 (Round intermediate calculations to 2 decimal places.)
Problem-6
Bentley estimates manufacturing overhead of $2,785,400 for 2019 and will apply overhead to units produced based on 733,000 machine hours. During 2019, Bentley used $1,580,000 of raw materials. paid $4,301,400 of direct labor, generated 728,000 machine hours. and produced 2,130,000 units.
Required:
Calculate Bentley’s predetermined overhead rate and cost per unit of production for 2019. (Round your answers to 2 decimal places.)
Problem-7
Tyler Company applies manufacturing overhead to production at the rate of $5.4 per direct labor hour and ended August with $13,400 underapplied overhead. Actual manufacturing overhead incurred for August amounted to $123,560.
Required:
How many direct labor hours did Tyler Company incur during August?
Problem-8
The following information is from ABC Company’s general ledger: Beginning and ending inventories, respectively, for raw materials were $9,900 and $11,900 and for work in process were $21,900 and $23,900. Raw material purchases and direct labor cost s incurred were $37,900 each, and manufacturing overhead applied amounted to $21,900.
Required:
Prepare a statement of cost of goods manufactured for ABC Company. (Amounts to be deducted should be indicated by o minus sign.)