Calculate the overhead costs applied to the product

Assignment Help Accounting Basics

Reference no: EM133064257

Product Costing Systems - Job Costing

Question 1: The following information relates to the Moonie Park Manufacturing Company for the year 2011.

Budgeted level of production was 29,000 machine hours Budgeted manufacturing overhead was $174,000
Actual manufacturing overhead for the year was $175,000
Actual machine hours used were 30,000

Assume the machine hour is the cost driver of MOH, calculate the overhead costs applied to the product.

Question 2:

Company B allocates overhead costs on the basis of the number of machine hours. Details concerning manufacturing overhead for the year are as follows:

Budgeted manufacturing overhead $420 000
Actual manufacturing overhead $480 000
Budgeted machine hours 30 000
Actual machine hours 31 000

Determine the extent to which overhead is under/ over allocated for the year. Provide the adjusting journal entry to account for the over or under applied amount of overhead.

Question 3:
Ranjith construction builds residential houses. It uses job-costing system with one indirect cost pool (building support or manufacturing overhead). Direct labour-hours is the allocation base for building support costs.

	Budget for 2011	Actual results for 2011
Building support costs	$8 800 000	$7 380 000
Direct labour-hours	160 000	164 000

Two builds were started and completed during 2011
	L Model house	M Model house
Direct material costs	$ 106 450	$ 127 604
Direct labour costs	$ 36 276	$ 41 410
Direct labour-hours	900	1010

Required
1. Compute applied MOH costs for each model.
2. What are the job costs of L model house and M model house?
3. Assume the actual MOH costs incurred for L and M models were $40500 and $45450 respectively. Calculate the under/over applied MOH for each model house and provide the adjusting journal entry.

Question 4:

The following information is provided in relation to Shanker Corporation for January.
(1) Opening balances:
Raw materials inventory $10,000 Work in process inventory $24,000 Finished goods inventory $53,000
(2) Closing balances:
Work in process inventory $32,000
Finished goods inventory $26,000
(3) Raw materials were purchased on credit for $63,000.
(4) Direct labour costs of $75,000 were incurred at a rate of $15 per hour.
(5) Manufacturing overhead was applied at a rate of $13.20 per direct labour hour.
(6) Actual manufacturing overhead costs incurred during January were $71,000 (including $50000 unpaid indirect labour and $21000 office supplies inventory).
(7) Jobs were sold on credit during the month for $345,000. The cost of goods sold (before any adjustment was made) during the month was $222,000.
Complete the relevant T- accounts (provided on next page) to show the flow of costs.

Reference no: EM133064257

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