Introduction to Accounting An Integrated Approach Eighth Edition Chapter 9 P9.9

9 Reemts Company manufactures bookcases. Unit-related manufacturing overhead is applied based on the number of direct labor hours worked. Estimated unit-related manufacturing overhead for the year is $320,000. Employees are expected to work 40,000 direct labor hours during the year. Batch-related overhead is applied on the basis of the number of production runs. Estimated batch-related manufacturing overhead for the coming year is $400,000. There are 1,000 production runs planned for the year. Reemts uses a perpetual inventory system. The following events occurred during the month of April: 1. Purchased 70,000 board feet of lumber at $0.30 per board foot. 2. Requisitioned 50,000 board feet of lumber into production (cost $0.25 per board foot). 3. Indirect materials (held as manufacturing supplies) in the amount of $4,500 were placed into production. 4. Twelve production runs producing 1,200 bookcases and requiring a total of 6,100 hours of direct labor at $6.00 per direct labor hour were completed during the month. Overhead is applied to production at this time. (Ignore payroll taxes.) 5. Indirect labor costs incurred totaled $30,000. (Ignore payroll taxes.) 6. Utility bill for the factory received and paid, $600. 7. Depreciation on the factory for April, $6,000. 8. A bill for advertising was received, but not paid, in the amount of $120. 9. Other manufacturing overhead totaling $21,500 was incurred. 10. Bookcases with a cost of $75,000 were completed during the month and transferred to the finished goods warehouse. A. Calculate the predetermined overhead rates. B. Prepare the journal entries to record the information given. C. Determine the over- or underapplied overhead, in total, for the period. D. Prepare a cost of goods manufactured schedule. 9 Reemts Company manufactures bookcases. Unit-related manufacturing overhead is applied based on the number of direct labor hours worked. Estimated unit-related manufacturing overhead for the year is $320,000. Employees are expected to work 40,000 direct labor hours during the year. Batch-related overhead is applied on the basis of the number of production runs. Estimated batch-related manufacturing overhead for the coming year is $400,000. There are 1,000 production runs planned for the year. Reemts uses a perpetual inventory system. The following events occurred during the month of April: 1. Purchased 70,000 board feet of lumber at $0.30 per board foot. 2. Requisitioned 50,000 board feet of lumber into production (cost $0.25 per board foot). 3. Indirect materials (held as manufacturing supplies) in the amount of $4,500 were placed into production. 4. Twelve production runs producing 1,200 bookcases and requiring a total of 6,100 hours of direct labor at $6.00 per direct labor hour were completed during the month. Overhead is applied to production at this time. (Ignore payroll taxes.) 5. Indirect labor costs incurred totaled $30,000. (Ignore payroll taxes.) 6. Utility bill for the factory received and paid, $600. 7. Depreciation on the factory for April, $6,000. 8. A bill for advertising was received, but not paid, in the amount of $120. 9. Other manufacturing overhead totaling $21,500 was incurred. 10. Bookcases with a cost of $75,000 were completed during the month and transferred to the finished goods warehouse. A. Calculate the predetermined overhead rates. B. Prepare the journal entries to record the information given. C. Determine the over- or underapplied overhead, in total, for the period. D. Prepare a cost of goods manufactured schedule