Job-order costing, Cost Accounting

Division B uses  normal  costing in its job-order costing system, with manufacturing overhead  applied  based on direct labour hours.  You have obtained the following information about the operation of the Division.

Required:

1)  What would be the amount of the „under - or - over applied manufacturing overhead? for the year.  Indicate whether it is under or over applied.)

2)  For this requirement assume that the:

  • Division?s cost of goods sold before any prorated adjustment for the under-or over allocated manufacturing overhead to that account  is $400,000
  • Overapplied manufacturing overhead for the period is $5000
  • Predetermined overhead rate is $15 per direct labour hour.
  • During the period, the division used 8,400 direct labour hours. 
  • Inventories on December 31 included:

Part A:
Give the general journal entry required on December 31,  Year 2  to close the overhead accounts  by proration based on  the ending balances  in Work in Process, Finished Goods and Cost of Goods Sold  (to the nearest whole $).

Part B

By how much would the net income change if the Division closed the overapplied overhead to the "Cost of Goods Sold" instead of prorating it?  Would there be an increase or decrease in net income?

Posted Date: 2/28/2013 3:05:18 AM | Location : United States







Related Discussions:- Job-order costing, Assignment Help, Ask Question on Job-order costing, Get Answer, Expert's Help, Job-order costing Discussions

Write discussion on Job-order costing
Your posts are moderated
Related Questions
You have just been assigned to replace the current Project Manager for a very important project.  You were provided a WBS for the project planning that had already been conducted,

according to a factory cost ledger, job no 51 has incurred the following costs: direct material - 30

a machine is purchased on july 1 2009 for $181,500. It has an expected useful life of 11 years and no salvage value. After five years, the machine is sold for $98,000 cash. What is

A machine costing $210,400 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the mac

with relevant illustrations and examples, discuss the different overhead costing and control method.

sales to profit volume ratio for three year

Listed below are some balances of XYZ, Inc as of and for the year ended December 31, 2012 and 2013 Year ending 12/31/13   Reven

#question techniques of payment under group bonus plan .


#purchase price R45 order costs R175 lead time 6 days cost of capital (after taxation) 20% direct inventory holding costs R25 annual demand 8500 units business operational 330day p