P4-10
Con-Aggie Manufacturing Company is studying the results of applying factory
overhead to production. The following data have been used: estimated factory
overhead: $60,000; estimated materials costs, $50,000; estimated direct labor
costs $60,000; estimated direct labor hours 10,000; estimated machine hours
20,000; work in process at the beginning of the month, none.
The actual factory overhead incurred for the
month of November was $75,000, and the production statistics on November 30 are
as follows:
Job
Materials Cost Direct Labor Costs Direct Labor Hours Machine Hours Date Jobs
Completed
101 5,000 6,000 1000 3,000 10-Nov
102 7,000 12,000 2,000 3,200 14-Nov
103 8,000 13,500 2,500 4,000 20-Nov
104 9,000 15,600 2,600 3,400 Inprocess
105 10,000 29,000 4,500 6,500 26-Nov
106 11,000 2,400 400 1,500 In process
Total 50,000 78,500 13,000 21,600
Required:
1.
Compute the predetermined rate, based on the following: a. direct labor cost,
b. direct labor hours, c. machine hours.
2.
Using each of the methods, compute the estimated total cost of each job at the
end of the month.
3.
Determine the under- or overapplied factory overhead, in total, at the end of
the month under each of the methods.
4.
Which method would you recommend, and why?
TUTORIAL
PREVIEW
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1.
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Predetermined
rates:
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||
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a.
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Direct
labor cost rate
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Estimated
overhead
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Estimated
labor cost
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100%
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=
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60,000
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÷
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60,000
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File name P4-10
Con-Aggie Manufacturing.xls File type: xls PRICE: $10
