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Custom Metal Works Products uses a Job-order costing system. Overhead costs applied to jobs on the basis of machine hours, at the beginning of the year, management estimated that 85,000 machine-hours would be required for the period's estimated level of production. The company also estimated $106,250 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $0.75 per machine hour.Required:1. Compute the company's predetermined overhead rate.2. Assume that during the year the company actually works only 80,000 machine-hours and incurs the following costs in the manufacturing overhead and work in process accounts:
Copy the data in the T-accounts above onto your answer and compute the amount of the overhead cost that would be applied to Work in Process for the year, and make the entry in your T-accounts.3. Compute the amount of underapplied or overapplied overhead for the year, and show the balance in your Manufacturing overhead T-account. Prepare a journal entry to close out the balance in this account to cost of goods sold.4. Explain why the manufacturing overhead was underapplied or overapplied for the year.
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You are in business of producing and selling 100-pound bags of health food for pet pigs. You plan to advertise that each bag will provide a pig its minimum weekly requirements of protein (200 grams), calcium (300 grams) and fiber (100 grams), and ..
Bubble Corporation manufactures two products, I and II, from a joint process. A single production costs $4,000 and results in 100 units of I and 400 units of II.
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