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Question 1:

Amy and Jay Golden have worked for five years in a firm specializing in restoration of historical buildings. Amy has focused on interior reconditioning and Jay on architectural and structural design. They have specialized in residential structures for the past two years, and are thinking of forming their own residential restoration firm. They plan to do all the structural and decorative design, and subcontract the actual construction and decorative work. One of their concerns is to have an accounting system in place when they begin their business. You have been asked to assist them by answering the following questions. Required: (1) Since we have a very basic service-type firm, can a simple accounting system be developed?

(2) What kinds of information does the accounting system need to collect?

Question 2:

2) LM Company listed the following data for 2016: Budgeted factory overhead $1,143,800 86,000 28,595 Budgeted direct labor hours Budgeted machine hours Actual factory overhead Actual direct labor hours Actual machine hours 1,101,770 87,200 28,300] Required: (1) Assuming KLM applied overhead based on direct labor hours, calculate the company's predetermined overhead rate for 2016. (2) Assuming KLM applied overhead based on machine hours, calculate the company's predetermined overhead rate for 2016. (3) If overhead is applied based on direct labor hours, calculate the overapplied/underapplied overhead. (4) If overhead is applied based on machine hours, calculate the overapplied/underapplied overhead

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