Weave Your Web is a web site production company that creates individualized web sites for customers...

 

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Weave Your Web is a web site production company that creates individualized web sites for customers and hence uses a job-order costing system. The company applies web site design overhead to jobs using a predetermined overhead rate based on direct labor cost. The information below has been taken from the cost records of Weave Your Web: Indirect Materials Used for Design of Web Sites $60 Total Design Costs Applied to Production during the calendar month $1,000 Design Overhead Applied $500 Selling and Administrative Expenses $300 Inventories: $100 $120 Raw Materials, January 1 Raw Materials, January 31 Work in Process, January 1 Work in Process, January 31 Finished Web Sites, January 1 $350 $550 $200 Finished Web Sites, January 31 $120 a. Compute the cost of materials purchased during the month. Assume there are no direct materials at Weave Your Web (given web sites aren't made up of materials). b. Compute the predetermined overhead rate that was used during the past month. c. Compute the Cost of Web Sites Designed (not sold) for the past month. d. Assume Weave Your Web received a utility bill at the design studio for $250 for January. What would be the correct journal entry to record this bill (which will be paid off later)? e. Assume actual design overhead was $650. Was overhead under or over applied? By how much? Explain how you would adjust Cost of Web Sites Sold (in words, journal entry, T- Account, whatever) by the amount under or over applied, given Weave Your Web only adjusts the Cost of Web Sites Sold account. Weave Your Web is a web site production company that creates individualized web sites for customers and hence uses a job-order costing system. The company applies web site design overhead to jobs using a predetermined overhead rate based on direct labor cost. The information below has been taken from the cost records of Weave Your Web: Indirect Materials Used for Design of Web Sites $60 Total Design Costs Applied to Production during the calendar month $1,000 Design Overhead Applied $500 Selling and Administrative Expenses $300 Inventories: $100 $120 Raw Materials, January 1 Raw Materials, January 31 Work in Process, January 1 Work in Process, January 31 Finished Web Sites, January 1 $350 $550 $200 Finished Web Sites, January 31 $120 a. Compute the cost of materials purchased during the month. Assume there are no direct materials at Weave Your Web (given web sites aren't made up of materials). b. Compute the predetermined overhead rate that was used during the past month. c. Compute the Cost of Web Sites Designed (not sold) for the past month. d. Assume Weave Your Web received a utility bill at the design studio for $250 for January. What would be the correct journal entry to record this bill (which will be paid off later)? e. Assume actual design overhead was $650. Was overhead under or over applied? By how much? Explain how you would adjust Cost of Web Sites Sold (in words, journal entry, T- Account, whatever) by the amount under or over applied, given Weave Your Web only adjusts the Cost of Web Sites Sold account.

Answer rating: 100% (QA)

ANSWER Weave Your Web a Particulars Amt a Opening Stock Indirect Materials jan 1 100 b Add Purchase ... View the full answer