Question :
171. Tough Hardware purchases raw materials and processes those purchases through : 1239461
171. Tough Hardware purchases raw materials and processes those purchases through a receiving/inspection process prior to stocking for production. Tough places 3 purchase orders for materials for production and receives the goods that day. The first PO is for 2,500 1/2”´ 96” milling blanks at $2.75 each. The second is for 4,000 pieces of 48” ´ 96” ´ 1” sheet steel at $15.55 each. The third PO is for five 55 gallon drums of Milling Lubrication Oil at $475.00 per barrel.The receiving/inspection process is completed and the goods are transferred from Receiving Inventory to Raw Materials. The Receiving/Inspection Department assigns manufacturing overhead of $55.00 per purchase order as well as $2.75 per piece on metal goods and $35.00 per container on fluids. All labor is allocated through overhead.(a) Write the journal entry to purchase and receive these items to Receiving Inventory on account.(b) Assign overhead to the metal goods.(c) Assign overhead to the fluid goods.(d) Transfer all goods to Raw Materials Inventory.
172. The Brass Works is in the process of determining manufacturing overhead. Journalize events (a) – (d) to Factory Overhead, Miscellaneous Expense, or allocated between the two as appropriate. All items were paid in cash at the time of acquisition. Next calculate the overhead application rate and apply overhead to Work-in-Process.
(a)
Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the value of the policy protects production, the balance protects the administrative offices.
(b)
The electric bill is received showing an amount due of $1,200. This meter is utilized only by production as the office spaces have their own meter.
(c)
Payroll reports that the sales manager’s salary for the period is $3,500 and that production supervisors wages for the period are $5,500.
(d)
The stockroom reports that $2,575 in materials were purchased for the production maintenance department.
(e)
If the driver for the application of overhead is drop-forge strokes and there are expected to be 1,000 strokes in this period, what is the rate per stroke? Do not round your answer.
(f)
Assuming that there are 1,150 drop-forge strokes in this period, apply factory overhead to Work In Process. Round your answers to nearest dollar.
Round overhead rate to four decimal places and total cost to nearest dollar.
173. The estimated total factory overhead cost and total machine hours for Department 40 for the current year are $250,000 and 56,250 respectively. During January, the first month of the current year, actual machine hours used totaled 5,100 and factory overhead cost incurred totaled $22,000.
(a)
Determine the factory overhead rate based on machine hours.
(b)
Present the entry to apply factory overhead to production in Department 40 for January.
(c)
What is the balance of Factory Overhead – Department 40 at January 31?
(d)
Does the balance of Factory Overhead – Department 40 at January 31 represent overapplied or underapplied factory overhead?
Round total cost to nearest dollar value.
