Cost accounting problems | Accounting homework help

 

 

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