The Detroit Gear Corporation uses Normal Job-Order Costing in its only production department. Overhead is applied...

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The Detroit Gear Corporation uses Normal Job-Order Costing in its only production department. Overhead is applied to jobs by a predetermined rate, which is based on direct labor hours. The Company began business on December 1, 2018. The only job started into process during December was Job 450. During December the Company purchased direct materials with a total cost of $45,000. $2,500 of these direct materials were used on Job 450. The Company also charged a total of $7,550 in conversion costs to Job 450 during December. Job 450 was NOT finished as of the end of December and no other jobs were worked on during the month. There was no underapplied or overapplied overhead for December. The following transactions occurred during 2019. ?w=0 Bey. Estimated overhead for 2019 is $1,250,000. The estimated direct labor hours for 2019 total 200,000. Direct materials purchased during 2019 cost a total of $750,000. Direct materials were used on jobs during 2019 as follows: 4. During 2019, direct labor hours were charged to jobs as follows: Job 450 Job 500 Job 550 Job 600 All direct labor hours used during 2019 had a rate of $20 per hour. 5. Other Costs incurred during 2019 include the following: Factory Equipment Calibration (PH) Factory Employee Training Lo Indirect Labor (04) Accounting Salaries Other Selling & Administrative Salaries (250,000 Indirect Material (OH) Factory Insurance (OH) Factory Utilities (OH) Selling & Administrative Utilities (2/5) $125,000 85,000 370,000 Miscellaneous Overhead (Actel OH) Misc. Selling & Administrative Expense (2/4) Factory Equipment Depreciation (DM) Finished Goods Warehouse Depreciation (4) No units of Job 500 were sold during 2019. 50,000 136,000 120,000 24,000 123,000 8,250 175,000 7,500 76. WH Job 450 Job 500 Job 550 Job 600 SDM = 2500 + 1 compersion Lost = DL+ OH = $7550. 2nd WIP 2018 8 Bag wil 2017 : 410.050 $150,250 $180,750 $237,125 $131,875 45,000 hours 56,100 hours 60,800 hours 23,100 hours 6. Jobs 450, 500 and 550 were completed during the year. Job 450 consisted of 268,310 units; Job 500 consisted 110,296 units; and Job 550 consisted of 153,015 units. 7. 200,000 units of Job 450 were sold and all units of Job 550 were sold at the following sales prices: Job 450 sold at $8 per unit Job 550 sold at $13 per unit Sort betren actual CH and I/S ENC E Add together the total cost charged to Jobs 450,500 and 550. Does this answer equal the amount of Cost of Goods Manufactured that you got in Part D? Should it? F. Compute the Underapplied or Overapplied Overhead for 2019. G. Prepare, in good form, an income statement for 2019 using our "method 1". Don't forget to include a proper heading. H. Now assume that you are to allocate (prorate) the underapplied or overapplied overhead to the appropriate accounts. You should be able to figure out how much applied overhead is in Work in Process (just Job 600). You can assume that there is $422,229 of applied overhead in Finished Goods. Based on the total applied overhead for the year, you should now be able to figure out how much applied overhead should be in Cost of Goods Sold. Do the proration and show your calculations as we did in class. I. If you were to prepare a new income statement after prorating underapplied or overapplied overhead, would income be higher or lower than what you got in Part "G"? By how much? The Detroit Gear Corporation uses Normal Job-Order Costing in its only production department. Overhead is applied to jobs by a predetermined rate, which is based on direct labor hours. The Company began business on December 1, 2018. The only job started into process during December was Job 450. During December the Company purchased direct materials with a total cost of $45,000. $2,500 of these direct materials were used on Job 450. The Company also charged a total of $7,550 in conversion costs to Job 450 during December. Job 450 was NOT finished as of the end of December and no other jobs were worked on during the month. There was no underapplied or overapplied overhead for December. The following transactions occurred during 2019. ?w=0 Bey. Estimated overhead for 2019 is $1,250,000. The estimated direct labor hours for 2019 total 200,000. Direct materials purchased during 2019 cost a total of $750,000. Direct materials were used on jobs during 2019 as follows: 4. During 2019, direct labor hours were charged to jobs as follows: Job 450 Job 500 Job 550 Job 600 All direct labor hours used during 2019 had a rate of $20 per hour. 5. Other Costs incurred during 2019 include the following: Factory Equipment Calibration (PH) Factory Employee Training Lo Indirect Labor (04) Accounting Salaries Other Selling & Administrative Salaries (250,000 Indirect Material (OH) Factory Insurance (OH) Factory Utilities (OH) Selling & Administrative Utilities (2/5) $125,000 85,000 370,000 Miscellaneous Overhead (Actel OH) Misc. Selling & Administrative Expense (2/4) Factory Equipment Depreciation (DM) Finished Goods Warehouse Depreciation (4) No units of Job 500 were sold during 2019. 50,000 136,000 120,000 24,000 123,000 8,250 175,000 7,500 76. WH Job 450 Job 500 Job 550 Job 600 SDM = 2500 + 1 compersion Lost = DL+ OH = $7550. 2nd WIP 2018 8 Bag wil 2017 : 410.050 $150,250 $180,750 $237,125 $131,875 45,000 hours 56,100 hours 60,800 hours 23,100 hours 6. Jobs 450, 500 and 550 were completed during the year. Job 450 consisted of 268,310 units; Job 500 consisted 110,296 units; and Job 550 consisted of 153,015 units. 7. 200,000 units of Job 450 were sold and all units of Job 550 were sold at the following sales prices: Job 450 sold at $8 per unit Job 550 sold at $13 per unit Sort betren actual CH and I/S ENC E Add together the total cost charged to Jobs 450,500 and 550. Does this answer equal the amount of Cost of Goods Manufactured that you got in Part D? Should it? F. Compute the Underapplied or Overapplied Overhead for 2019. G. Prepare, in good form, an income statement for 2019 using our "method 1". Don't forget to include a proper heading. H. Now assume that you are to allocate (prorate) the underapplied or overapplied overhead to the appropriate accounts. You should be able to figure out how much applied overhead is in Work in Process (just Job 600). You can assume that there is $422,229 of applied overhead in Finished Goods. Based on the total applied overhead for the year, you should now be able to figure out how much applied overhead should be in Cost of Goods Sold. Do the proration and show your calculations as we did in class. I. If you were to prepare a new income statement after prorating underapplied or overapplied overhead, would income be higher or lower than what you got in Part "G"? By how much?

Answer rating: 100% (QA)

To answer the questions we need to go through the given information step by step A Total cost charged to Jobs 450 500 and 550 Job 450 Direct Materials Conversion Costs 2500 7550 10050 B Cost of Goods ... View the full answer