Question

23. On November 1, Arvelo Corporation had $34,000 of raw materials on hand. During the month, the company purchased an additional $76,000 of raw materials. During November, $91,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,400. Prepare journal entries to record these events. Use those journal entries to answer the following questions:

The credits to the Raw Materials account for the month of November total:

25.

Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment expense	$ 78,200
Supervisory expense	$ 6,500

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Machining	Order Filling		Other
Equipment expense	0.50	0.30		0.20
Supervisory expense	0.50	0.20		0.30

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

Activity:

	Machine-hours (Machining)	Orders (Order Filling)
Product M0	1,090	1,220
Product H2	9,410	1,640
Total	10,500	2,860

What is the overhead cost assigned to Product H2 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)

Answer 1

24) Journal entry

No	General Journal	Debit	Credit
1	Raw material	76000
	Account payable		76000
2	Work in process	91000
	Manufacturing overhead	3400
	Raw material		94400

The credits to the Raw Materials account for the month of November total: $94400

25) First stage allocation

	Machining	Order filling	Other	Total
Equipment expense	39100	23460	15640	78200
Supervisory expense	3250	1300	1950	6500
Total	42350	24760	17590	84700

Machining rate = 42350/10500 = 4.03 per MH

Order filling = 24760/2860 = 8.66 per order filling

Overhead assigned to product H2 = (9410*4.03+1640*8.66) = $52124.70 or 52125