Amount of underapplied or overapplied overhead

Assignment Help Accounting Basics
Reference no: EM13759978

Lennox Company uses a job order costing system. The company uses predetermined overhead rates in applying manufacturing overhead costs to individual jobs. The predetermined overhead rate in Department A is based on machine-hours, and the rate in Department B is based on direct labor cost. At the beginning of 2014, the company's management has made the following estimates for the year:

Department A Department B

Direct labour-hours 15,000 30,000

Machine-hours 50,000 12,000

Direct labour cost $80,000 $172,000

Manufacturing overhead 162,500 215,000

Job 145 was initiated into production on August 1 and completed on September 15. The company's cost records show the following information on the job:

Department A Department B

Direct labour-hours 22 40

Machine-hours 80 20

Direct material used $450 $250

Direct labour cost 120 180

Required:

1. Compute the predetermined overhead rates that should be used during 2014 in Department A and B. (1 mark)

2. Compute the total overhead cost applied to job 145. (1 mark)

3. What would be the total cost of job 145? If the job contained 10 units, what would be the cost per unit? (1 mark)

4. At the end of 2014, the records of Lennox Company reveal the following actual cost and operating data for all jobs work on during the year:

Department A Department B

Direct labour hours 14,500 32,000

Machine-hours 48,000 13,000

Direct labour cost $78,000 $174,000

Manufacturing ovherhead 160,000 216,000

Compute the amount of underapplied or overapplied overhead in each department at the end of 2014 and explain most likely reasons why the underapplication or overapplication has taken place.

Reference no: EM13759978

Questions Cloud

Effects of coastlines : The difference between weathering and erosion,and how they affect coastlines.
Information security : Write the word "statistic" without the repeated letters. Then complete the cipher with the unused alphabet characters.
Compute production costs per unit : Prepare absorption and contribution margin income statements for the succeeding quarter for the division. Compute production costs per unit for both approaches and for both quarters.
Types of input control and explain the function of each : Explain the function of input controls. Identify four (4) types of input control and explain the function of each
Amount of underapplied or overapplied overhead : Compute the amount of underapplied or overapplied overhead in each department at the end of 2014 and explain most likely reasons why the underapplication or overapplication has taken place.
How do the economies of the countries : How do the economies of the countries you selected compare to the U.S. - Is either of the selected countries still in an agrarian phase of economic development? An industrial phase? Explain.
Business benefits for jewelers company : Suggest at least five (5) expected business benefits that Especially for You Jewelers company might derive from a new system. Provide a rationale for your suggestions.
Create a sequence and a communication diagram : Create a sequence and a communication diagram for each scenario of each use case identified in the functional model. Create a behavioral state machine for each of the complex classes in the class diagram
Managerial and financial accounting : Objective: Compare and contrast managerial and financial accounting Directions: Using Power Point, prepare a presentation. Your presentations must have a title slide, an introductory slide, a slide with a two column chart, and a conclusion slide

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Armstrong employs a plantwide fixed overhead rate in its

armstrong company manufactures three models of paper shredders including the waste container which serves as the base.

  Aziz corporation produces and sells a single product

Aziz Corporation produces and sells a single product. Data concerning that product appear below.

  The management of baggerly corporation would like to

nbspthe companys controller has providethe management of baggerly corporation would like to investigate the

  On january 2 2011 potter company acquired 90 of the

on january 2 2011 potter company acquired 90 of the outstanding common stock of smiley company for 480000 cash. just

  Discuss any benefits you can think of for a company

Discuss any benefits you can think of for a company to (a) cross-list its equity shares on more than one national exchange, and (b) to source new equity capital from foreign investors as well as domestic investors.

  Lucinda owns 1100 shares of old corporation stock at a time

lucinda owns 1100 shares of old corporation stock at a time when old corporation has 2000 shares of stock outstanding.

  How much dividend income does speedways have

a. How much dividend income does Speedways have?  b. How much and what kind of taxable income does Speedways have because of the distribution?  c. What is Speedways's basis in its stock immediately after the distribution?

  Examine pepsico incs consolidated balance sheet on p a6 in

examine pepsico inc.s consolidated balance sheet on p. a6 in appendix a of financial accounting especially its current

  As of december 31 gammelguard corporation has outstanding

as of december 31 gammelguard corporation has outstanding accounts receivable of 2.4 million. sales on credit during

  Present value of cash inflows for project

Using the net present value method, the present value of cash inflows for Project A is $44,000 and the present value of cash inflows of Project B is $24,000. If Project A and Project B require initial investments of $40,000 and $20,000, respective..

  Juan transferred 100 percent of his stock in rosa company

juan transferred 100 percent of his stock in rosa company to azul corporation in a type b stock-for stock exchange. in

  On may 1 2007 logan co issued 300000 of 7 bonds at 103

on may 1 2007 logan co. issued 300000 of 7 bonds at 103 which are due on april 30 2017. twenty detachable stock

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd