Question :
139. The estimated total factory overhead cost and total machine hours : 1233784
139. The estimated total factory overhead cost and total machine hours for Department 40 for the current year are $225,000 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 $19,800.
(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?
140. A firm produces its products by a continuous process involving three production departments, 1 through 3. Present entries to record the following selected transactions related to production during August:
(a)
Materials purchased on account, $130,000.
(b)
Material requisitioned for use in Department 1, $125,700, of which $124,200 entered directly into the product.
(c)
Labor cost incurred in Department 1, $195,400, of which $174,000 was used directly in the manufacture of the product.
(d)
Factory overhead costs for Department 1 incurred on account, $52,700.
(e)
Depreciation on machinery in Department 1, $29,200.
(f)
Expiration of prepaid insurance chargeable to Department 1, $7,000.
(g)
Factory overhead applied to production, $105,300.
(h)
Output of Department 1 transferred to Department 2, $362,700.
141. Easy-Flow Paints produces mixer base paint through a two stage process, Mixing and Packaging. The following events depict the movement of value into and out of production. Journalize each event if appropriate, if not, provide a short narrative reason as to why you choose not to journalize that action.Keith, the Production Manager, accepts an order to continue processing the current run of mixer base paint.
(a)
$27,000.00 worth of materials are withdrawn from Raw Materials inventory. Of this amount, $25,500.00 will be issued to the Mixing Department and the balance will be issued to the Maintenance Department to be used on production line machines.
(b)
Keith calculates that labor for the period is $12,500.00. Of this value all but $1,750.00 is directly associated with mixing. The balance is maintenance and indirect labor.
(c)
Keith, who is paid a salary but earns about $35.00 / hour, spends 1 hour inspecting the production line.
(d)
The manufacturing overhead drivers for Mixing are (1) hours of mixer time at $575.00 per hour, and material movements from Raw Materials at $125.00 per movement. An inspection of the machine timers reveals that a total of 8 hours has been consumed in making this product. An inspection of “Stocking Orders” indicates that only one material movement was utilized to “load” the raw materials. (Note: All values have been journalized to Mfg Overhead, you need only apply it to the production run.)
(e)
Within Easy-Flo items are transferred between departments at a standard cost or value. This production run has created 4,015 gallons of mixer base paint. This paint is transferred to Packaging at a standard cost of $10.05 per gallon.
(f)
Packaging draws $755.00 in raw materials for packaging of this production run.
(g)
Packaging documents that 12 hours of direct labor at $10.25 per hour were consumed in the packaging of this production run.
(h)
Packaging uses a driver of direct labor hours to allocate manufacturing overhead at the rate of $25.00 per hour.
(i)
Packaging transfers these 1,005 gallons of packaged goods to Finished Goods Inventory at a standard cost of $10.25 per gallon.
142. Chang Co. manufacturers its products in a continuous process involving two departments, Machining and Assembly. Present entries to record the following selected transactions related to production during June:
(a)
Materials purchased on account, $225,000.
(b)
Materials requisitioned by: Machining, $73,000 direct and $9,000 indirect materials; Assembly, $4,900 indirect materials.
(c)
Direct labor used by Machining, $23,000, Assembly, $47,000.
(d)
Depreciation expenses: Machining, $2,000; Assembly, $8,000.
(e)
Factory overhead applied: Machining, $9,700; Assembly, $11,300.
(f)
Machining Department transferred $98,300 to Assembly Department; Assembly Department transferred $83,400 to finished goods.
(g)
Cost of goods sold, $72,000.
143. The inventory at June 1 and costs charged to Work in Process – Department 60 during June are as follows:
3,800 units, 80% completed ($25,000 Materials, $35,400 conversion)
$ 60,400
Direct materials, 32,000 units
368,000
Direct labor
244,000
Factory overhead
188,000
Total cost to be accounted for
$860,400
During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on June 1. On June 30, the inventory of work in process consisted of 4,600 units which were 40% completed. Inventories are costed by the average cost method and all materials are added at the beginning of the process.Determine the following, presenting your computations:
(a)
equivalent units of production for conversion cost
(b)
conversion cost per equivalent unit and material cost per equivalent unit.
(c)
total and unit cost of finished goods completed in the current period
(d)
total cost of work in process inventory at June 30
