Problem 1 Factory overhead for the Praeger Company has been estimated as follows: Nonvariable overhe
Problem 1
Factory overhead for the Praeger Company has been estimated as follows:
|
Nonvariable overhead |
$122,500 |
|
Variable overhead |
$90,000 |
|
|
|
|
Budgeted direct labor hours |
42,500 |
Production for the month was 90 percent of the budget, and actual factory overhead totaled $175,000.
Calculate:
a. The predetermined factory overhead rate.
b. The under- or overapplied factory overhead.
Problem 2
The Tidle Manufacturing Company uses a job order cost system. Factory wages are paid on a straight hourly basis with indirect labor getting $8.50 an hour and direct labor getting $10.00 an hour.
During the week of January 7, the following hours were worked:
|
|
Direct |
Indirect |
|
Cutting Department |
2,200 |
250 |
|
Splicing Department |
2,400 |
200 |
|
Sanding Department |
1,850 |
125 |
|
Joining Department |
4,250 |
325 |
Salaries and wages are paid weekly, with administrative salaries totaling $16,500 and salesperson's salaries totaling $12,200.
The following deductions are to be considered:
|
FICA tax |
8.0% |
|
Federal income tax |
12.0% |
|
State income tax |
2.0% |
|
Federal unemployment tax |
1.0% |
|
State unemployment tax |
5.0% |
Prepare journal entries to record:
a. The payroll.
b. The payment of the payroll.
c. The payroll distribution.
d. The employer's payroll tax expense.
Problem 3
The Outdoor Manufacturing Company produces sporting equipment. The company maintains a single raw materials inventory account for both direct and indirect materials. The following information came from the factory ledger accounts for December:
|
Raw Materials, December 1 |
$ 45,500 |
|
Work in Process, December 1 |
125,000 |
|
Finished Goods, December 1 |
175,000 |
|
Raw materials purchases (during December) |
623,000 |
|
Direct labor |
435,000 |
|
Repairs and maintenance |
37,200 |
|
Indirect materials |
16,700 |
|
Utilities |
63,200 |
|
Indirect labor |
38,200 |
|
Supervisors' salaries |
18,300 |
|
Raw Materials, December 31 |
43,600 |
|
Work in Process, December 31 |
135,000 |
|
Finished Goods, December 31 |
150,000 |
Compute the cost of direct materials used during the month of December.
Problem 4
The following inventory data relate to the Reta Company:
|
|
INVENTORIES |
|
||
|
|
Beginning |
Ending |
||
|
Finished goods |
$80,000 |
$100,000 |
||
|
Work in process |
65,000 |
70,000 |
||
|
Direct materials |
60,000 |
64,000 |
||
Revenues and costs for the period:
|
Sales |
$740,000 |
|
Cost of goods available for sale |
650,000 |
|
Total manufacturing costs |
575,000 |
|
Factory overhead |
154,000 |
|
Direct materials used |
164,000 |
|
Selling and administrative expenses |
51,000 |
Compute the following for the year:
a. Direct materials purchased
b. Direct labor costs incurred
c. Cost of goods sold
d. Gross profit
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