Log in
Accounting
2
answers
1
watching
40
views

L & L, CPAs, employs two full-time professional CPAs andfive support employees. Budgeted direct salary costs include$160,000 for each CPA. The support employees are considered asindirect costs, and this cost was budgeted for $200,000 althoughthe actual cost was $225,000. Actual salaries were $155,000 foreach CPA. Direct and indirect costs are applied on a CPA-labor-hourbasis. Total budgeted CPA-labor-hours were 5,000. If a client used500 labor-hours, what are the budgeted direct-cost rate and thebudgeted indirect-cost rate, respectively?

Watch
2
answers
1
watching
40
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share

Related questions

Scholastic Brass Corporation manufactures brass musical instruments for use by high school students. The company uses a normal costing system, in which manufacturing overhead is applied on the basis of direct-labor hours. The company’s budget for the current year included the following predictions.

Budgeted total manufacturing overhead ..........................................................................................................$426,300

Budgeted total direct-labor hours (based on practical capacity) .....................................................................20,300

During March, the firm worked on the following two production jobs: Job number T81, consisting of 76 trombones Job number C40, consisting of 110 cornetsThe events of March are described as follows:

a. One thousand square feet of rolled brass sheet metal were purchased on account for $5,000.

b. Four hundred pounds of brass tubing were purchased on account for $4,000.

c. The following requisitions were submitted on March 5: Direct labor: Job number T81, 800 hours at $20 per hour Direct labor: Job number C40, 900 hours at $20 per hour Indirect labor: General factory cleanup, $4,000 Indirect labor: Factory supervisory salaries, $9,000 Requisition number 112: 250 square feet of brass sheet metal at $5 per square foot (for job number T81) Requisition number 113: 1,000 pounds of brass tubing, at $10 per pound (for job number C40) Requisition number 114: 10 gallons of valve lubricant, at $10 per gallonAll brass used in production is treated as direct material. Valve lubricant is an indirect material.

d. An analysis of labor time cards revealed the following labor usage for March.

Direct labor: Job number T81, 800 hours at $20 per hour

Direct labor: Job number C40, 900 hours at $20 per hour Indirect labor:

General factory cleanup, $4,000 Indirect labor:

Factory supervisory salaries, $9,000

e. Depreciation of the factory building and equipment during March amounted to $12,000.

f. Rent paid in cash for warehouse space used during March was $1,200.

g. Utility costs incurred during March amounted to $2,100. The invoices for these costs were received, but the bills were not paid in March.

h. March property taxes on the factory were paid in cash, $2,400.

i. The insurance cost covering factory operations for the month of March was $3,100. The insurance policy had been prepaid.

j. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during March amounted to $8,000.

k. Depreciation on administrative office equipment and space amounted to $4,000.

l. Other selling and administrative expenses paid in cash during March amounted to $1,000.

m. Job number T81 was completed on March 20.

n. Half of the trombones in job number T81 were sold on account during March for $700 each.

The March 1 balances in selected accounts are as follows:

Cash ...................................................................................................................................................................$?? 10,000

Accounts Receivable .........................................................................................................................................21,000

Prepaid Insurance .............................................................................................................................................5,000

Raw-Material Inventory .....................................................................................................................................149,000

Manufacturing Supplies Inventory ....................................................................................................................500

Work-in-Process Inventory ................................................................................................................................91,000

Finished-Goods Inventory .................................................................................................................................220,000

Accumulated Depreciation: Buildings and Equipment .....................................................................................102,000

Accounts Payable ..............................................................................................................................................13,000

Wages Payable ..................................................................................................................................................8,000

Required:

1. Calculate the company’s predetermined overhead rate for the year.

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made in requirement (2).

4. Calculate the overapplied or underapplied overhead for March. Prepare a journal entry to close this balance into Cost of Goods Sold.

5. Prepare a schedule of cost of goods manufactured for March.

6. Prepare a schedule of cost of goods sold for March.

7. Prepare an income statement for March.

Scholastic Brass Corporation manufactures brass musicalinstruments for use by high school students. The company uses anormal costing system, in which manufacturing overhead is appliedon the basis of direct-labor hours. The company’s budget for thecurrent year included the following predictions.

Budgeted total manufacturing overhead..........................................................................................................$426,300

Budgeted total direct-labor hours (based on practical capacity).....................................................................20,300

During March, the firm worked on the following two productionjobs: Job number T81, consisting of 76 trombones Job number C40,consisting of 110 cornetsThe events of March are described asfollows:

a. One thousand square feet of rolled brass sheet metal werepurchased on account for $5,000.

b. Four hundred pounds of brass tubing were purchased on accountfor $4,000.

c. The following requisitions were submitted on March 5: Directlabor: Job number T81, 800 hours at $20 per hour Direct labor: Jobnumber C40, 900 hours at $20 per hour Indirect labor: Generalfactory cleanup, $4,000 Indirect labor: Factory supervisorysalaries, $9,000 Requisition number 112: 250 square feet of brasssheet metal at $5 per square foot (for job number T81) Requisitionnumber 113: 1,000 pounds of brass tubing, at $10 per pound (for jobnumber C40) Requisition number 114: 10 gallons of valve lubricant,at $10 per gallonAll brass used in production is treated as directmaterial. Valve lubricant is an indirect material.

d. An analysis of labor time cards revealed the following laborusage for March.

Direct labor: Job number T81, 800 hours at $20 per hour

Direct labor: Job number C40, 900 hours at $20 per hour Indirectlabor:

General factory cleanup, $4,000 Indirect labor:

Factory supervisory salaries, $9,000

e. Depreciation of the factory building and equipment duringMarch amounted to $12,000.

f. Rent paid in cash for warehouse space used during March was$1,200.

g. Utility costs incurred during March amounted to $2,100. Theinvoices for these costs were received, but the bills were not paidin March.

h. March property taxes on the factory were paid in cash,$2,400.

i. The insurance cost covering factory operations for the monthof March was $3,100. The insurance policy had been prepaid.

j. The costs of salaries and fringe benefits for sales andadministrative personnel paid in cash during March amounted to$8,000.

k. Depreciation on administrative office equipment and spaceamounted to $4,000.

l. Other selling and administrative expenses paid in cash duringMarch amounted to $1,000.

m. Job number T81 was completed on March 20.

n. Half of the trombones in job number T81 were sold on accountduring March for $700 each.

The March 1 balances in selected accounts are as follows:

Cash...................................................................................................................................................................$??10,000

Accounts Receivable.........................................................................................................................................21,000

Prepaid Insurance.............................................................................................................................................5,000

Raw-Material Inventory.....................................................................................................................................149,000

Manufacturing Supplies Inventory....................................................................................................................500

Work-in-Process Inventory................................................................................................................................91,000

Finished-Goods Inventory.................................................................................................................................220,000

Accumulated Depreciation: Buildings and Equipment.....................................................................................102,000

Accounts Payable..............................................................................................................................................13,000

Wages Payable..................................................................................................................................................8,000

Required:

1. Calculate the company’s predetermined overhead rate for theyear.

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made inrequirement (2).

4. Calculate the overapplied or underapplied overhead for March.Prepare a journal entry to close this balance into Cost of GoodsSold.

5. Prepare a schedule of cost of goods manufactured forMarch.

6. Prepare a schedule of cost of goods sold for March.

7. Prepare an income statement for March.

NEED ALL SEVEN QUESTIONS ANSWERED PLEASE.

Step 1 You work for Thunderduck Custom Tables Inc. This is the first month of operations. The company designs and manufactures specialty tables. Each table is specially customized for the customer. This month, you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. This is a no nail, no screw, and no glue manufacturing ( no indirect materials used). You will be keeping track of the costs incurred to manufacture the tables.
The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis.
Table Top $ 1,100.00
Table Leg $ 200.00
Drawer $ 310.00
Assume a $25 per hour wage rate to the assembly employees.
The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours.
The company estimates that there will be 12 direct labor hours worked during the month.
The estimated manufacturing overhead cost for the month is:
a. Factory supervisor salary per month $ 3,000.00
b. Rent for the factory per month $ 600.00
c. Depreciation of factory equipment per month $ 600.00
Total Estimated manufacturing overhead $ 4,200.00
What is the predetermined manufacturing overhead rate?
Step 2 The first order you received was to manufacture a table using a table top and four legs. This is your Job #1. Go to the "Job #1 Cost Sheet" tab. There are three assembly employees that spend 2 hours each to make the table. Here, you will calculate the cost of making the table by calculating the direct material, direct labor and applied overhead cost. Complete the job cost sheet by calculating the direct material, direct labor and manufacturing overhead applied that would be incurred for job #1.
Step 3 The customer that has ordered Job #2, wants a table that is the same as Job #1, but wants to also add a drawer to the table. There are three assembly employees that spend 3 hours each to make the table. On the "Job #2 Cost Sheet" tab you calculate the cost of making the table by calculating the direct material, direct labor and applied overhead cost.
Step 4 Here you will find a list of transactions that must be recorded for the company for the month of December. On the "General Journal" tab, you will record all of these entries in proper journal entry format. The following is a list of transactions that need to be recorded for the company for activity in the month of December. Record these in the "General Journal" tab using the proper journal entry format. Please use the following accounts: Accounts Receivables, Raw materials, Work in process, Finished goods, Accumulated depreciation, Accounts payable, Salaries and wages payable, Sales revenue, Manufacturing overhead, Cost of goods sold, Salaries and wages expense, Advertising expenses, and Depreciation expense.
1-Dec Raw Materials purchased on account, $11,000.
5-Dec All Raw Materials needed for Job #1 were requisitioned from the material storage for use during the month. Assume all materials are direct.
10-Dec The following employee costs were incurred but not paid during the month:
Total cost incurred for direct labor for Job #1 Cost Sheet.
Salary for supervisor of the factory $3,500.
Administrative Salary $2,000.
15-Dec All Raw Materials needed for Job #2 were requisitioned from the material storage for use during the month. Assume all materials are direct.
16-Dec Rent for the month of December for the factory building incurred but not paid $600.
17-Dec Advertising costs incurred but not paid for the month was $1,400.
20-Dec Depreciation for the month of December was recorded on equipment was $750 ($150 for equipment used in the factory and the remainder for equipment used in selling and administrative activities).
22-Dec Manufacturing overhead cost was applied based on direct labor hours to Job #1 based on the POHR determined on the "Job Cost Sheet".
26-Dec Job #1 was completed and transferred to Finished Goods during the month.
28-Dec The completed table from Job #1 was sold on account to the customer for $16,000 during the month. (Hint: Make sure to account for the cost of the table that was sold using the cost from the job cost sheet.)
31-Dec Direct labor cost incurred but not paid for three employees to start manufacturing Job #2. The employees only worked one hour each, three hours total during the month and they did not complete their work on the job.
31-Dec Manufacturing overhead cost was applied based on direct labor hours to Job #2 based on the POHR. Only three direct labor hours were worked on Job #2 during the month.
31-Dec Any underapplied or overapplied overhead for the month was closed out to Cost of Goods Sold.
Step 5 Post the journal entries that you recorded on the "General Journal" tab to the "T-accounts" tab. This is the company's first month of business, so there will not be any beginning balances. Compute the balance for each T-account after all of the entries have been posted.
Step 6 Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold on the "Schedule of COGM and COGS" tab for Job #1 and Job #2 that were worked on during the month by the company. Make sure to follow the format noted in your book (pg. 87). (Hint: This is the company's first month of operations and therefore the beginning balances will be zero.)
Step 7 Prepare an Income Statement for the month using the Traditional Format on the "Income Statement" tab.
Step 8 Answer the additional questions below
Check Figure: Cost of Goods Manufactured= $4,150
What is the ending balance for raw materials?
What is the ending balance for work in process?
What is the ending balance for finished goods?
What is the actual manufacturing overhead cost incurred during December?
What is the total applied manufacturing overhead cost during December?
What is the unadjusted cost of goods sold?
Was the manufacturing overhead for the month of December overapplied/underapplied ?
What is the amount of Manufacturing overhead overapplied/underapplied?
What is the adjusted cost of goods sold?
What is gross margin?
What is net operating income?
What is the total prime cost for Job#1?
What is the total conversion cost for job #1?
What is the total product cost for job#1?
What was the period cost incurred for the month of December?
What is the contribution margin for Job #1 (assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)?
What would be the actual (not applied) total fixed manufacturing overhead cost incurred for the company for the month if the order in Job #1 is for five tables instead of one table assuming this cost is with in the relevant range?

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in