Paddys Parts manufacturers specialized parts for oil rigs and relies on job costing to cost their inventory.
Question:
Paddys Parts manufacturers specialized parts for oil rigs and relies on job costing to cost their inventory. At the begining of the year, management determined the following related to part #81:
Budgeted:
Total overhead $350,000
Cost allocation base machine hours
Machine hours 50,000
Direct Material per part $10
Begining of year balances
Raw Materials $20,000
Work in Process $15,000
Finished Goods $27,000
Cost of goods sold. $0
At the end of the year, Paddys produced 55,000 parts, using $495,000 of raw materials and $425,000 of overhead. In the process, they used 52,000 machine hours.
(a) Calculate the predetermined allocation rate for manufacturing overhead
(b) calculate the amount of overhead allocated. Close he factory overhead account by using the "write-off" to COGS approach. Show all of your journal entries.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr