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Tugas Akmen 3.2A - 3.3A

The document describes three different scenarios involving the calculation of predetermined overhead rates and the application of overhead to jobs. In the first scenario, Tony's Tables applies overhead to jobs based on direct labor hours. The overhead rate is calculated and job costs are determined. In the second scenario, Ready Brakes applies overhead to brake repair jobs based on direct labor hours. Again, the overhead rate is calculated and job costs and profit are determined. In the third scenario, Cabinets4U applies overhead based on direct labor hours using a predetermined rate. The rate is calculated and the amount of overhead applied and overapplied is determined when actual overhead and labor hours differ from estimates.

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Dias Adhyaksa
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630 views2 pages

Tugas Akmen 3.2A - 3.3A

The document describes three different scenarios involving the calculation of predetermined overhead rates and the application of overhead to jobs. In the first scenario, Tony's Tables applies overhead to jobs based on direct labor hours. The overhead rate is calculated and job costs are determined. In the second scenario, Ready Brakes applies overhead to brake repair jobs based on direct labor hours. Again, the overhead rate is calculated and job costs and profit are determined. In the third scenario, Cabinets4U applies overhead based on direct labor hours using a predetermined rate. The rate is calculated and the amount of overhead applied and overapplied is determined when actual overhead and labor hours differ from estimates.

Uploaded by

Dias Adhyaksa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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3-2A – Predetermined overhead rate: costing an individual job

Tony’s Tables makes high-end, custom boardroom tables. The company applies overhead costs to jobs
on the basis of direct labour hours. The company estimates manufacturing overhead for the year to be
$320,000. The company expects its direct labour workforce to work for 20,000 hours during the year.
Job #1843 shows the following cost information:
Walnut: 300 board feet used at a cost of $15 per board foot.
Labour: 240 hours at a cost of $20 per hour.
Required:
a.) Compute the cost of the job.
b.) Assuming the company marks up their price to by three times the cost, what will the
company charge its customer for the table?

Answer:

Estimated MOH $ 320.000


a.) =
Estimated Base 20.000 DL /Hour
= 16 DL/Hour
300 x 15 = $4,500 DM
240 x 20 = $4,800 DL
240 x 16 = $3,840 MOH
$13,140 cost
b.) $13,140 x 3 = $39,420

3-2B – Predetermined overhead rate: costing an individual job


Ready Brakes specializes in brake repair in automobiles. The company applies overhead costs to jobs
on the basis of direct labour hours. For the current year, total manufacturing overhead was expected to
cost $50,000. The total expected direct labour hours were anticipated to be 8,000. The company was
working on job #842, a brake pad replacement on a Volkswagen Golf. The following costs were
incurred:
New Brake Pads: $8
Labour: 40 minutes of employee time – wage rate of $9 per hour.
Required:
a.) Determine the cost of the job.
b.) Assuming the company charges a flat rate of $50 to replace brake pads, how much gross
profit will have been earned on Job #842?

Answer:
$ 50,000
a.) MOH ¿ =$ 6,25
8.000
DM = $8
DL 40 x $9 = $360
MOH 40 x $6,25 = $250
$618 cost

$ 50,000
b.) MOH ¿ =$ 6,25
8.000
DM = $50
DL 40 x $9 = $360
MOH 40 x $6,25 = $250
$660 cost
Gross profit = $660 - $618
= $42

3-3A – Predetermined Overhead Rate, Overapplied and Underapplied Overhead


Cabinets4U makes and installs custom cabinets for home renovations. The company applies overhead on the
basis of direct labour hours. The company estimates its annual overhead to be $125,000 and it expects
employees to work 10,000 hours. During the year, employees actually worked 11,000 hours and the actual
amount spent on overhead was $130,000.
Required:
a.) Compute the predetermined overhead rate.
b.) How much overhead would be applied to jobs during the year?
c.) By how much was overhead overapplied or underapplied for the year?

Answer:
Budgeting Overhead $ 125,000
a.) = =$ 12,5 ( POH )
Budgeting Activity 10,000

b.) Applied overhead = $12,5 x 11,000 = $137,500

c.) Overapplied = $137,500 - $130,000


= $7,500

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