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4-27 Requirements

How many units were produced in 2007?

4-28 Requirements

What is the total Cost of Job A?

What is the total factory overhead applied during September?

What is the overapplied or underapplied overhead for September?

4-31 Requirements

Compute the amount of underapplied or overapplied overhead for February.

What is the predetermined factory overhead rate?

Compute the cost of direct materials issued to production during the month.

Prepare a journal entry showing the transfer of the completed job to Finished Goods
ing the month.

job to Finished Goods Inventory.

4-32 Requirements

Compute the firm's predetermined factory overhead rate for 2007.

Calculate the amount of overapplied or underapplied overhead.

Prepare a journal entry to prorate overapplied or underapplied overhead to Work-in-Process Invent

Finished Goods Inventory, and Cost of Goods Sold accounts.
d to Work-in-Process Inventory,
4-33 Requirements

1. Compute the predetermined overhead rate
2. What is the total amount of the bill that Norton will send Central Ohio Bank?

Ohio Bank?
4-34 Requirements

Compute both unit cost and total cost for each shirt size produced in April.

Medium Large
# of Units 5,000 10,000
Direct Materials $4.00 $5.00
Cutting $3.00 $3.00
Assembly $1.50 $1.50
Finishing $1.00 $1.00
TOTAL Product cost per unit $9.50 $10.50

TOTAL Product cost $47,500 $105,000

Prepare journal entries to record direct materials and conversion costs incurred in th
departments and finished costs for both shirt sizes
ersion costs incurred in the three
4-36 Requirements

1. What was the actual factory overhead for Department 203 for 2004?

2. What was Department 203's underapplied overhead for 2004?

3. Job 1376 was the only job completed and sold in 2004. What amount was included
cost of the goods sold for this job?

4. What was the amount of Work-in-Process Inventory at the end of 2004?

5. Assume that factory overhead was underapplied in the amount of $14,000 for depa
underapplied overhead were distributed between the cost of the goods sold and inve
of the underapplied overhead was charged to the year-end Work-in-Process Inventor
amount was included in the

d of 2004?

nt of $14,000 for department 203. If

e goods sold and inventory, how much
k-in-Process Inventory?
4-37 Requirements

1. Prepare a statement of cost of goods manufactured.

2. Calculate cost of goods sold.
4-40 Requirements

Calculate the amount of overapplied or underapplied overhead and state whether the cos
sold account will be increased or decreased by the adjustment.
Calculate the total manufacturing cost for Job X and Job Y for March 2004.
d state whether the cost of goods 
he adjustment.
4-43 Requirements

1.) Compute Joshi budgeted overhead rate.  Explain how this is used.

2.) Compute the amount of overhead to be charged to the Barry and Miles accounts using t
predetermined overhead rate calculated in requirement 1.

3.) Compute a separate job cost for the Barry and the Miles accounts.
Miles accounts using the 
4-44 Requirements

1.) Calculate the direct materials, direct labor, factory overhead, and total costs for each job

2.) Perform the same calculations as in requirement (1), but assume that the direct labor-ra
hour increased by 10 percent in Department 1 and 25 percent in Department 2.
d total costs for each job started in June.

e that the direct labor-rate per 
epartment 2.
4-46 Requirements

1.) Compute the unit cost for sweet corn and regular corn.

2.) Record appropriate journal entries

4-48 Requirements

1.) Calculate the direct materials, direct labor, factory overhead, and total costs for e

2.) Perform the same calculations as in requirement (1), but assume that labor
rates in both departments have increased by 20 percent.
total costs for each job started in May.

that labor
Mansfields Machine Shop
Annual Q1 Q2 Q3
Number of machine hours/quarter 36,250  5,000  12,500  7,500 
   150 hrs /month x 3 months 27 machines = 12,150  hours capacity
Fixed Administrative Costs/qtr 100,000  25,000  25,000  25,000 
Overhead per quarter 1,800,000  450,000  450,000  450,000 
Overhead per machine hour  (  ) 90.00  36.00  60.00 
Variable cost per machine hour 45.00  45.00  45.00 
   operating labor and supplies
Full Cost per machine hour 135.00  81.00  105.00 

Cost used in Pricing Orders/hr 85.00  135.00  81.00 

Price based on % markup 150% 127.50  202.50  121.50 

Annual OH Rate 49.6552 
Price Based on Annual Rate 141.98  141.98  141.98 

4-49 Solution
4.  The analyses 
a)  An  annual 
quarterly  a
third  quarte
rates deter
rate for any
b)  The result 
•  can Man
pricing  rate
•  if  the  in
•  if  the  in
firm’s  c
a)  given  the  s




4-50 Solution


1) Describe the sh
4-51 Solution

2) Explain the mi
department would

3) Recommend w
he shortcomings of th

e misconceptions in
ould be reduced to z

nd ways to improve E

4-52 Solution
1.  Assume th

2.  If factory o
me that factory overh
erminedfactory over

ory overhead were a