70.2K

Verified Solution

Link Copied!

Exercise 2-1 Compute the Predetermined Overhead Rate [LO2-1]

Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 31,000 direct labor-hours would be required for the periods estimated level of production. The company also estimated $537,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead for the year was $695,286 and its actual total direct labor was 31,500 hours.

Required:

Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places.) 1. what is predetermined overhead rate? Exercise 2-2 Apply Overhead [LO2-2] Luthan Company uses a predetermined overhead rate of $22.60 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $271,200 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $267,000 and 11,800 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. 2. what is manufacturing overhead applied? Exercise 2-3 Computing Job Costs [LO2-3] Mickley Companys predetermined overhead rate is $23.00 per direct labor-hour and its direct labor wage rate is $11.00 per hour. The following information pertains to Job A-500: Direct materials $220 Direct labor $110 Required: 1. What is the total manufacturing cost assigned to Job A-500? what is total manufacturing cost? 2. If Job A-500 consists of 60 units, what is the average cost assigned to each unit included in the job? (Round your answer to 2 decimal places.) what is average cost? Exercise 2-4 Prepare Journal Entries [LO2-4] Larned Corporation recorded the following transactions for the just completed month. a. $71,000 in raw materials were purchased on account. b. $69,000 in raw materials were requisitioned for use in production. Of this amount, $56,000 was for direct materials and the remainder was for indirect materials. c. Total labor wages of $123,500 were incurred. Of this amount, $104,000 was for direct labor and the remainder was for indirect labor. d. Additional manufacturing overhead costs of $192,000 were incurred. Required: Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 4. please prepare journal entry worksheet. Exercise 2-5 Prepare T-Accounts [LO2-5, LO2-7] Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories. a. $76,500 in raw materials were purchased for cash. b. $71,200 in raw materials were requisitioned for use in production. Of this amount, $65,700 was for direct materials and the remainder was for indirect materials. c. Total labor wages of $152,100 were incurred and paid. Of this amount, $133,600 was for direct labor and the remainder was for indirect labor. d. Additional manufacturing overhead costs of $126,400 were incurred and paid. e. Manufacturing overhead costs of $123,400 were applied to jobs using the companys predetermined overhead rate. f. All of the jobs in progress at the end of the month were completed and shipped to customers. g. Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold. Required: 1. Post the above transactions to T-accounts. (given account list)- cash, raw material, work in process, finished good, manufacturing overhead, cost of goods)

Answer & Explanation Solved by verified expert

See Answer