Cost accounting problems | Accounting homework help

 

 

Factory overhead for the Praeger Company has been estimated as follows:

 

 

    Nonvariable overhead

 

$122,500

 

    Variable overhead

 

$90,000

 

 

 

 

 

    Budgeted direct labor hours

 

42,500

 

 

Production for the month was 90 percent of the budget, and actual factory overhead totaled $175,000.

 

 

Calculate:

 

a.   The predetermined factory overhead rate.

 

b.   The under- or overapplied factory overhead.

 

 

 

 

Problem 2

 

The Tidle Manufacturing Company uses a job order cost system.  Factory wages are paid on a straight hourly basis with indirect labor getting $8.50 an hour and direct labor getting $10.00 an hour.

 

 

During the week of January 7, the following hours were worked:

 

 

 

 

Direct

 

Indirect

 

Cutting Department

 

2,200

 

250

 

Splicing Department

 

2,400

 

200

 

Sanding Department

 

1,850

 

125

 

Joining Department

 

4,250

 

325

 

 

Salaries and wages are paid weekly, with administrative salaries totaling $16,500 and salesperson’s salaries totaling $12,200.

 

 

The following deductions are to be considered:

 

 

FICA tax

 

8.0%

 

Federal income tax

 

12.0%

 

State income tax

 

2.0%

 

Federal unemployment tax

 

1.0%

 

State unemployment tax

 

5.0%

 

 

Prepare journal entries to record:

 

 

a.   The payroll.

 

b.   The payment of the payroll.

 

c.   The payroll distribution.

 

d.   The employer’s payroll tax expense.

 

 

 

 

Problem 3

 

The Outdoor Manufacturing Company produces sporting equipment. The company maintains a single raw materials inventory account for both direct and indirect materials.  The following information came from the factory ledger accounts for December:

 

 

Raw Materials, December 1

 

$ 45,500

 

Work in Process, December 1

 

125,000

 

Finished Goods, December 1

 

175,000

 

Raw materials purchases (during December)

 

623,000

 

Direct labor

 

435,000

 

Repairs and maintenance

 

37,200

 

Indirect materials

 

16,700

 

Utilities

 

63,200

 

Indirect labor

 

38,200

 

Supervisors’ salaries

 

18,300

 

Raw Materials, December 31

 

43,600

 

Work in Process, December 31

 

135,000

 

Finished Goods, December 31

 

150,000

 

 

Compute the cost of direct materials used during the month of December.

 

 

 

 

 

Problem 4

 

The following inventory data relate to the Reta Company:

 

 

 

INVENTORIES

 

 

 

 

Beginning

 

Ending

 

Finished goods

 

$80,000 

 

$100,000 

 

Work in process

 

65,000 

 

70,000 

 

Direct materials

 

60,000 

 

64,000 

 

         

 

Revenues and costs for the period:

 

 

Sales

 

$740,000

 

Cost of goods available for sale

 

650,000

 

Total manufacturing costs

 

575,000

 

Factory overhead

 

154,000

 

Direct materials used

 

164,000

 

Selling and administrative expenses

 

51,000

 

 

Compute the following for the year:

 

a.   Direct materials purchased

 

b.   Direct labor costs incurred

 

c.   Cost of goods sold

 

d.   Gross profit

 

 

 

 

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