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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 17
Analysis of Overhead Using a Predetermined Rate
Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows:
![Analysis of Overhead Using a Predetermined Rate Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed. Required Answer the following questions. a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished. c. How much of factory overhead cost was applied to Job 6025 during March d. What total amount of overhead was applied to jobs during March e. Compute actual factory overhead incurred during March. f. At the end of the year, Kansas Company had the following account balances: How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.](https://storage.examlex.com/SM1700/11eb7cd0_655c_e2db_ba5d_d18361fbb667_SM1700_00.jpg)
The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed.
![Analysis of Overhead Using a Predetermined Rate Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed. Required Answer the following questions. a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished. c. How much of factory overhead cost was applied to Job 6025 during March d. What total amount of overhead was applied to jobs during March e. Compute actual factory overhead incurred during March. f. At the end of the year, Kansas Company had the following account balances: How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.](https://storage.examlex.com/SM1700/11eb7cd0_655c_e2dc_ba5d_45748eaa308e_SM1700_00.jpg)
![Analysis of Overhead Using a Predetermined Rate Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed. Required Answer the following questions. a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished. c. How much of factory overhead cost was applied to Job 6025 during March d. What total amount of overhead was applied to jobs during March e. Compute actual factory overhead incurred during March. f. At the end of the year, Kansas Company had the following account balances: How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.](https://storage.examlex.com/SM1700/11eb7cd0_655c_e2dd_ba5d_7b105d970a4c_SM1700_00.jpg)
Required
Answer the following questions.
a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished.
c. How much of factory overhead cost was applied to Job 6025 during March
d. What total amount of overhead was applied to jobs during March
e. Compute actual factory overhead incurred during March.
f. At the end of the year, Kansas Company had the following account balances:
![Analysis of Overhead Using a Predetermined Rate Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed. Required Answer the following questions. a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished. c. How much of factory overhead cost was applied to Job 6025 during March d. What total amount of overhead was applied to jobs during March e. Compute actual factory overhead incurred during March. f. At the end of the year, Kansas Company had the following account balances: How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.](https://storage.examlex.com/SM1700/11eb7cd0_655c_e2de_ba5d_fb56d0086703_SM1700_00.jpg)
How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.
![Analysis of Overhead Using a Predetermined Rate Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed. Required Answer the following questions. a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished. c. How much of factory overhead cost was applied to Job 6025 during March d. What total amount of overhead was applied to jobs during March e. Compute actual factory overhead incurred during March. f. At the end of the year, Kansas Company had the following account balances: How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.](https://storage.examlex.com/SM1700/11eb7cd0_655c_e2df_ba5d_65b1b6dfed03_SM1700_00.jpg)
Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows:
The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed.
Required
Answer the following questions.
a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. ( Note: Regardless of your answer to requirement [ a ], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [ b ] through [ e ].)b. Compute the total cost of Job 6023 when it is finished.
c. How much of factory overhead cost was applied to Job 6025 during March
d. What total amount of overhead was applied to jobs during March
e. Compute actual factory overhead incurred during March.
f. At the end of the year, Kansas Company had the following account balances:
How would you recommend treating the overapplied overhead, assuming that it is not material Show the new account balances in the following table.
Explanation
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Verified
Overhead costs:
Overhead costs are thos...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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