+1-415-670-9189
info@expertsmind.com
Firm predetermined overhead rate
Course:- Accounting Basics
Reference No.:- EM13149047




Assignment Help
Assignment Help >> Accounting Basics

Burlington Clock Works manufactures fine, handcrafted clocks. The firm uses a job-order costing system, and manufacturing overhead is applied on the basis of direct-labor hours. Estimated manufacturing overhead for the year is $240,000. The firm employs 10 master clockmakers, who constitute the direct-labor force. Each of these employees is expected to work 2,000 hours during the year. The following events occurred during October.

a. The firm purchased 3,000 board feet of mahogany veneer at $11 per board foot.

b. Twenty brass counterweights were requisitioned for production. Each weight cost $23.

c. Five gallons of glue were requisitioned for production. The glue cost $20 per gallon. Glue is treated as an indirect material.

d. Depreciation on the clockworks building for October was $8,000.

e. A $400 utility bill was paid in cash.

f. Time cards showed the following usage of labor:

Job number G60: 12 grandfather's clocks, 1,000 hours of direct labor

Job number C81: 20 cuckoo clocks, 700 hours of direct labor

The master clockmakers (direct-labor personnel) earn $20 per hour.

g. The October property tax bill for $910 was received but has not yet been paid in cash.

h. The firm employs laborers who perform various tasks such as material handling and shop cleanup. Their wages for October amounted to $2,500.

i. Job number G60, which was started in July, was finished in October. The total cost of the job was $14,400.

j. Nine of the grandfather's clocks from job number G60 were sold in October for $1,500 each.

Required:

1. Calculate the firm's predetermined overhead rate for the year.

2. Prepare journal entries to record the events described above.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
The new boss had little appreciation for all types of information. Use textbook terms to describe the type of information he embraced, and the type he rejected. How might th
Identify and discuss the reasons why dividends are sometimes paid out even when the funds could be better reinvested in business or when firm has to tap outside sources to p
A company reported interest expense of $580,000 for the year. Interest payable was $30,000 and $70,000 at the beginning and the end of the year, respectively. What was the amo
The Sanchez Corporation is preparing its 2012 balance sheet. The company records show the following selected amounts at the end of the accounting period, December 31, 2012:
At the time Fisher Corporation became a subsidiary of Ashbury Corporation, Fisher switched depreciation of its plant assets from the straight-line method to the sum-of-the-y
Bruce Brown, a wealthy investor, exchanged a plot of land that originally cost him $20,000 for 1,000 shares of $10 par common stock issued to him by Dunn Corp. On the same dat
Tom and Nancy are married and file a jointly. The income for the year is made up of: 1) $120,000 in combined salaries 2) $1,000 interest income 3) $1,000 LTCG 4) $1,500 o
A & B: What are the most prudent decisions she can make about her responsibilities to herself and others? What are the implications of those decisions even if there is no vi