Question 7PA2-3 (Algo) Calculating Predetermined Overhead Rates, Recording Manufacturing Costs, and Analyzing Overhead [LO 2-3, 2-4, 2-5]Tyler Tooling Company uses a job order cost system with...

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Question 7 PA2-3 (Algo) Calculating Predetermined Overhead Rates, Recording Manufacturing Costs, and Analyzing Overhead [LO 2-3, 2-4, 2-5] Tyler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $252,800 and total machine hours at 63,200. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job:     Job 101 Job 102 Job 103 Total Direct materials used $ 10,200   $ 7,700   $ 5,400   $ 23,300   Direct labor $ 17,800   $ 5,100   $ 5,500   $ 28,400   Machine hours   1,900 hours   2,400 hours   900 hours   5,200 hours Job 101 was completed and sold for $50,200. Job 102 was completed but not sold. Job 103 is still in process. Actual overhead costs recorded during the first month of operations totaled $19,500. Required: 1. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) 2. Compute the total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations. (Round your intermediate calculations to 2 decimal places.) 3. Compute the balance in the Work in Process Inventory account at the end of the first month. (Round your intermediate calculations to 2 decimal places.) 4. How much gross profit would the company report during the first month of operations before making an adjustment for over- or underapplied manufacturing overhead? (Round your intermediate calculations to 2 decimal places.) 5-a. Determine the balance in the Manufacturing Overhead account at the end of the first month. (Round your intermediate calculations to 2 decimal places.) 5-b. Is it over- or underapplied?   Question 8 PA2-5 (Static) Recording Manufacturing Costs and Analyzing Manufacturing Overhead [LO 2-3, 2-4, 2-5] Christopher’s Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow:     Raw Materials Inventory $ 20,000 Work in Process Inventory   15,000 Finished Goods Inventory   32,000   The following transactions occurred during January: (a) Purchased materials on account for $26,000. (b) Issued materials to production totaling $40,000, 80 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $69,700 were recorded as follows:     $18,000 for assembly workers         5,200 for factory supervision        31,000 for administrative personnel        15,500 for sales commissions (d) Recorded depreciation: $8,500 for factory machines, $2,400 for the copier used in the administrative office. (e) Recorded $4,000 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $7,800 in other factory costs in cash. (g) Applied manufacturing overhead at a rate of 300 percent of direct labor cost. (h) Completed all jobs but one; the job cost sheet for the uncompleted job shows $10,000 for direct materials, $3,000 for direct labor, and $9,000 for applied overhead. (i) Sold jobs costing $70,000. The revenue earned on these jobs was $91,000. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling, General, and Administrative Expenses. g. Sales Revenue. 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold. *Below is the table they had in the question. Unable to copy and past   Question 9 PA2-7 (Algo) Selecting an Allocation Base and Analyzing Manufacturing Overhead [LO 2-3, 2-5] Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours.   Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here:     Estimated Value   Actual Value Manufacturing overhead cost $ 587,000     $ 648,000   Direct labor cost $ 389,000     $ 443,000   Direct labor hours   15,800 hours     17,300 hours Machine hours   6,800 hours     7,800 hours   Required: 1. Based on the company’s current allocation base (direct labor hours), compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.)   2. If the company had used direct labor dollars (instead of direct labor hours) as its allocation base, compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places, i.e. 3.63%) b. Applied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.)   3. If the company had used machine hours (instead of direct labor hours) as its allocation base, compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.)   4. Based on last year’s data alone, which allocation base would have provided the most accurate measure for applying manufacturing overhead costs to production?
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Answer To: Question 7PA2-3 (Algo) Calculating Predetermined Overhead Rates, Recording Manufacturing Costs,...

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Question 7
PA2-3 (Algo) Calculating Predetermined Overhead Rates, Recording Manufacturing Costs, and Analyzing Overhead [LO 2-3, 2-4, 2-5]
Tyler Tooling Company uses a job order cost system with overhead applied to products on the bas
is of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $252,800 and total machine hours at 63,200. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job:
 
     
    Job 101
    Job 102
    Job 103
    Total
    Direct materials used
    $
    10,200
     
    $
    7,700
     
    $
    5,400
     
    $
    23,300
     
    Direct labor
    $
    17,800
     
    $
    5,100
     
    $
    5,500
     
    $
    28,400
     
    Machine hours
     
    1,900
    hours
     
    2,400
    hours
     
    900
    hours
     
    5,200
    hours
    
Job 101 was completed and sold for $50,200.
Job 102 was completed but not sold.
Job 103 is still in process.
Actual overhead costs recorded during the first month of operations totaled $19,500.
Required:
1. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.)
Solution: Predetermined overhead rate = $ 4.00
2. Compute the total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations. (Round your intermediate calculations to 2 decimal places.)
Solution: Total Manufacturing Overhead applied to the Work in Process Inventory account during the first month of operations = 4.00 *(5,200) = $20,800.00
3. Compute the balance in the Work in Process Inventory account at the end of the first month. (Round your intermediate calculations to 2 decimal places.)
Solution: Balance in the Work in Process Inventory account at the end of the first month = $5,400 + $5,500 + (900*$4) = $14,500.00
4. How much gross profit would the company report during the first month of operations before making an adjustment for over- or underapplied manufacturing overhead? (Round your intermediate calculations to 2 decimal places.)
Solution: Gross Profit = $50,200 – (10,200 + 17,800 + (1,900*4))
Gross Profit = $50,200 – $35,600.00
Gross Profit = $14,600.00
5-a. Determine the balance in the Manufacturing Overhead account at the end of the first month. (Round your intermediate calculations to 2 decimal...
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