Duke Company is a furniture manufacturer. At the end of November two jobs are in work-in-process. The
Question:
Duke Company is a furniture manufacturer. At the end of November two jobs are in work-in-process. The following table provides the information about Jobs 401 and 402.
Job 401 | Job 402 | |
Direct labor | $20,000 | $25,000 |
Direct materials | $ 35,000 | $ 20,000 |
Direct labor hours | 2,000 | 2,500 |
Machine hours | 1,500 | 3,000 |
The predetermined overhead rate for Duke is based on budgeted direct labor hours, 100,000, and the budgeted overhead cost, $750,000. The actual data for November are:
Direct Labor Hours | 15,000 |
Overhead | $95,500 |
Finished Goods Inventory | $60,000 |
Cost of Goods Sold | $400,000 |
There is no beginning inventory. Duke prorates overhead variance to FG, WIP, COGS based on total costs in these accounts.
(a) Determine the predetermined overhead application rate and the cost of WIP before overhead variance proration.
(b) Determine the overhead variance and prorate the variance to WIP, FG, and COGS.
Thomson Company manufactures mosquito repellant. There are multiple processing departments. The following information comes from the first processing department:
Beginning WIP | None |
Units started in November | 40,000 |
Units completed and transferred out | 36,000 |
Ending work in process (units) | 4,000 (60% complete for conversion) |
Conversion cost incurred in November | $ 19,200 |
Material cost incurred in November (raw material is added in the beginning of the process) | $16,000 |
Determine the cost of goods transferred out and the cost of ending inventory of WIP for November.
Expert Answer:
Answer a Predetermined overhead application rate Budgeted overhead cost 750000 Budgeted direct labor ... View the full answer
