Question : 25) The following information was gathered for Zeba Company for : 1212070

25) The following information was gathered for Zeba Company for the year ended December 31, 2014

BudgetedActual

Direct labor-hours50,000dlh60,000dlh

Factory overhead$550,000$600,000

Assume that direct labor-hours are the cost-allocation base.

Required:

a.Compute the budgeted factory overhead rate.

b.Compute the factory overhead applied.

c.Compute the amount of over/underapplied overhead.

26) Markswell Corp uses a budgeted factory overhead rate to apply overhead to production. The following data are available for the year ended December 31, 2014. The company has budgeted factory overhead of $750,000, direct labor costs of $500,000, and direct labor hours of 15,000. The actual factory overhead incurred is $800,000, direct labor costs of 450,000, and direct labor hours of 17,000.

Required:

a.Determine the budgeted factory overhead rate based on direct labor-hours.

b.What is the applied overhead based on direct labor-hours?

c.Is overhead overapplied or underapplied? Explain.

27) Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows:

Direct materials              $ 60,000

WIP              190,000

Finished goods              250,000

Total              $500,000

Required:

a.Determine the budgeted factory overhead rate per machine-hour.

b.Compute the over/underapplied overhead.

c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach.

d.Prepare the journal entry to dispose of the variance using the proration approach.

28) Health Care County Hospital uses an indirect job-costing system for all patients. In June, the budgeted nursing care charges for each department and budgeted allocation bases of nursing days are as follows:

                 June                 Critical CareSpecial CareGeneral Care

Budgeted nursing costs              $2,480,000              $1,644,000              $1,280,400

Budgeted nursing days              5,000              4,000              8,000

Patient Ms. Pinto spent six days in critical care, eight days in special care. She was shifted back to critical care due to an emergency for 6 days and finally the remainder of the month was spent in general care.

Required:

a.Determine the budgeted overhead rate for each department.

b.What are the total charges to Ms. Pinto if she was in the facility the entire month?

29) Hammond and Jarrett provide tax consulting for estates and trusts. Their job-costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (research support). The indirect-cost pool contains all the costs except direct personnel costs. All budgeted indirect costs are allocated to individual jobs using actual professional labor-hours.

Required:

a.Discuss the reasons a consulting firm might use a normal costing system rather than an actual costing system.

b.What might be some reasons for the firm to change from a one-pool to a multiple-pool allocation concept?