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.


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

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

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Six simple events, with probabilities P (E1) = 0.11; P (E2) = P (E5) = 0.20; P (E3) = 0.25; P (E4) = 0.09; P (E6) = 0.15, constitute the entire set of out- comes of an ex
1. Construct NPV profiles for Projects A and B. 2. What is each project's IRR? 3. If each project's cost of capital were 10%, which project, if either, should be selected? I
On January 1, 2015, Day Corp. entered into a 10-year lease agreement with Ward, Inc. for industrial equipment. Annual lease payments of $10,000 are payable at the end of
a prepare income statements segmented by products. Include a column for the entire firm in the statement. b. if ellie manufactureing eliminates product B, what would be the im
Determine the contribution margin in dollars, per unit and as a ratio. Using the contribution margin technique, compute the break-even point in dollars and in units.
_____ 5. The corporation called in all its outstanding shares of stock and exchanged them for new shares on a 2-for-1 basis, reducing the par value at the same time to $50 per
a. What were the contributions to multiemployer pension plans for 2006, 2005, and 2004? Comment on the trend. b. Determine the total liability for multiemployer pension plans
The company has a convertible bond issue outstanding. The bonds were issued four years ago at par ($2,000,000), carry a 7% interest rate, and are convertible into 40,000 sha