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Question
Whittier Manufacturing uses a job order cost accounting system that charges overhead to jobs on the basis of direct labor cost. Whittier used the following cost predictions: overhead costs $1,285,750, and direct labor costs of $695,000. At year-end, the companys records show that actual overhead costs for the year are $1,278,800, and actual direct labor costs are $692,000.
a. Determine the predetermined overhead rate for the year.
b. Compute the amount of overapplied or underapplied overhead.
c. Prepare the adjusting entry to allocate the over- or underapplied overhead assuming the amount if immaterial.
Answer
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Related questions
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Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.
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A fixed budget performance report never provides useful information for evaluating variances.
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A variable or flexible budget is so named because it only focuses on variable costs.
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Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
a. Beginning cash balance on June 1 is $52,000.
b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000.
d. Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30.
e. Budgeted depreciation expense for June: $24,000.
f. Other cash expenses budgeted for June: $282,000.
g. Accrued income taxes due in June: $48,000.
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Q:
Use the following information to prepare the June cash budget for Arbor Company. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30.
a. Beginning cash balance on June 1 is $52,000.
b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
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What are the four steps in the effective management of variance analysis?
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C. $22,000 favorable.
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Q:
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A. Debited for standard labor cost.
B. Debited for actual labor cost.
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Q:
Adams, Inc. uses the following standard to produce a single unit of its product: overhead (2 hrs. @ $3/hr.) $ 6. The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:
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E. $3,695U.
Q:
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
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B. $28,000 unfavorable.
C. $45,000 unfavorable.
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Q:
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Q:
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B. $120 favorable.
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Q:
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C. Control purposes only.
D. Planning and control purposes.
E. Planning and budgeting purposes.