Question

Calculate and Use Overhead Rate Selected data for the consulting department of Kingman Consulting Inc., follow:...

Calculate and Use Overhead Rate

Selected data for the consulting department of Kingman Consulting Inc., follow:

Estimated consulting overhead cost for the year $558,000
Estimated direct labor cost for the year (@ $9/hr.) 324,000
Actual consulting overhead cost for May 29,000
Actual direct labor cost for May (2,400 hours) 22,000

Assuming that direct labor hours is the basis for applying consulting overhead,

a. Calculate the predetermined overhead rate per direct labor hour

b. Prepare a journal entry that applies consulting overhead for May.

General Journal
Description Debit Credit

work in process inventory

 Answer Answer

consulting overhead

 Answer Answer

c. By what amount is consulting overhead over-or under-applied in May?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a.

Estimated direct labor hours = $324000/ 9 = 36000 hours

predetermined overhead rate = Estimated consulting overhead / Estimated direct labor hours = $558000 / 36000 = $15.50 per hour

b.

General Journal
Description Debit Credit
work in process inventory (2400*$15.50) 37200
      consulting overhead 37200

c.

consulting overhead over-or under-applied in May = Applied - actual overhead

= $37200 - 29000

= $8,200 Overapplied

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Calculate and Use Overhead Rate Selected data for the consulting department of Kingman Consulting, Inc., follow:...
Calculate and Use Overhead Rate Selected data for the consulting department of Kingman Consulting, Inc., follow: Estimated consulting overhead cost for the year $810,000 Estimated direct labor cost for the year (@ $9/hr.) 405,000 Actual manufacturing overhead cost for May 52,000 Actual direct labor cost for May (2,400 hours) 44,000 Assuming that direct labor cost is the basis for applying consulting overhead, a. Calculate the predetermined overhead rate. Answer% b. Prepare a journal entry that applies consulting overhead for May....
Calculate and Use Overhead Rate Selected data for the consulting department of Austin Consulting, Inc., follow:...
Calculate and Use Overhead Rate Selected data for the consulting department of Austin Consulting, Inc., follow: Estimated consulting overhead cost for the year $405,000 Estimated direct labor cost for the year (@ $9/hr.) 450,000 Actual manufacturing overhead cost for January 24,000 Actual direct labor cost for January (1,200 hours) 16,500 Assuming that direct labor cost is the basis for applying consulting overhead, a. Calculate the predetermined overhead rate. Answer% b. Prepare a journal entry that applies consulting overhead for January....
Determine and Use Overhead Rate Cortez Consulting, Inc., expects the following costs and expenses during the...
Determine and Use Overhead Rate Cortez Consulting, Inc., expects the following costs and expenses during the coming year: Direct labor (@ $18/hr.) $324,000 Sales commissions 74,000 Overhead 288,000 a. Compute a predetermined overhead rate applied on the basis of direct labor hours. Round to two decimal places, if applicable. $Answer b. Prepare a general journal entry to apply overhead during an interim period when 3,000 direct labor hours were worked. General Journal Description Debit Credit Answer Answer Answer Answer Answer...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production, Reconciling Overhead at the End of the...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production, Reconciling Overhead at the End of the Year, Adjusting Cost of Goods Sold for Under- and Overapplied Overhead At the beginning of the year, Han Company estimated the following: Overhead $180,000 Direct labor hours 90,000 Han uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 8,150. By the end of the year, Han showed the following actual amounts:...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production At the beginning of the year, Debion...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production At the beginning of the year, Debion Company estimated the following: Overhead $700,500 Direct labor hours 78,250 Debion uses normal costing and applies overhead on the basis of direct labor hours. For the month of March, direct labor hours were 14,085. Required: 1. Calculate the predetermined overhead rate for Debion. Round your answer to the nearest cent. $ per direct labor hour 2. Calculate the overhead applied to production in March....
Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the...
Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $508,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $656,884 and its actual total direct labor was 29,500 hours. Required: Compute the...
XYZ Company uses a job costing system and applies manufacturing overhead using a predetermined overhead rate...
XYZ Company uses a job costing system and applies manufacturing overhead using a predetermined overhead rate based on direct labor hours. Information for the current year is as follows: Estimated manufacturing overhead OMR65,000; Actual manufacturing overhead OMR70,000; Estimated direct labor hours 20,000; Actual direct labor hours 22,000. The amount of over- or underapplied overhead for the year was Select one: a. OMR1,500 underapplied b. None of the answers given c. OMR5,500 overapplied d. OMR5,000 overapplied e. OMR5,000 underapplied f. OMR1,500...
Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the...
Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $577,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead for the year was $722,648 and its actual total direct labor was 29,500 hours. Required: Compute the...
Exercise 2-1 Compute a Predetermined Overhead Rate [LO2-1] Harris Fabrics computes its plantwide predetermined overhead rate...
Exercise 2-1 Compute a Predetermined Overhead Rate [LO2-1] Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 35,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $555,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.00 per direct labor-hour. Harris’s actual manufacturing overhead cost for the year was $692,504 and its...
Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance The cost accountant...
Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance The cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $3,000,000, and total direct labor costs would be $2,400,000. During May, the actual direct labor cost totaled $198,400, and factory overhead cost incurred totaled $253,200. a. What is the predetermined factory overhead rate based on direct labor cost? Enter your...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT