Verry Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: ?Total direct labor-hours60,000?Total fixed manufacturing overhead cost$342,000?Variable manufacturing overhead per direct labor-hour$2.40Recently Job X711 was completed and required 90 direct labor-hours.Required:a. Calculate the estimated total manufacturing overhead for the year.b. Calculate the predetermined overhead rate for the year.c. Calculate the amount of overhead applied to Job X711.
What will be an ideal response?
a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $342,000 + ($2.40 per direct labor-hour × 60,000 direct labor-hours) = $342,000 + $144,000 = $486,000
b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $486,000 ÷ 60,000 direct labor-hours = $8.10 per direct labor-hour
c. Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.10 per direct labor-hour × 90 direct labor-hours = $729
You might also like to view...
When writing for a claim or adjustment, what should be included in the closing paragraph?
A) Specific explanation of reason for the claim B) An offering of supporting documentation such as receipts C) A request for specific action D) A statement of the problem E) The remedy being sought
Personal defenses are effective against all holders, whether or not the holder is a holder in due
course. Indicate whether the statement is true or false
SaaS refers to
A) supplying online access over networks to storage devices and storage area network technology. B) managing combinations of applications, networks, systems, storage, and security as well as providing Web site and systems performance monitoring to subscribers over the Internet. C) self-contained services that communicate with each other to create a working software application. D) easy-to-use software tools for displaying Web pages. E) hosting and managing access to software applications delivered over the Internet to clients on a subscription basis.
Identify a true statement about management by objectives (MBO).
A. Setting and monitoring the achievement of these objectives does not require paperwork. B. Senior-level managers in the organization work with the board of directors to set these objectives. C. The performances of managers and employees are measured against these objectives. D. Managers dictate these objectives to employees.