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129. Huckeby Corporation bases its predetermined overhead rate on the estimated machine-
hours for the upcoming year. Data for the upcoming year appear below:
Estimated machine-hours 24,000
Estimated variable manufacturing overhead $3.89 per machine-hour
Estimated total fixed manufacturing overhead $535,200
Required:
Compute the company's predetermined overhead rate.
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130. Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order
costing system and applies overhead to jobs on the basis of direct labor-hours. For the current
year, Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of
manufacturing overhead cost. The following summarized information relates to January of the
current year. The raw materials purchased include both direct and indirect materials.
Raw materials purchased on account $1,412,000
Direct materials requisitioned into production $1,299,500
Indirect materials requisitioned into production $98,000
Direct labor cost (7,900 hours @ $40 per hour) $316,000
Indirect labor cost (10,200 hours @ $16 per hour) $163,200
Depreciation on the factory building $190,500
Depreciation on the factory equipment $890,700
Utilities for the factory $79,600
Cost of jobs finished $2,494,200
Cost of jobs sold $2,380,000
Sales (all on account) $3,570,000
Required:
Prepare journal entries to record Quark's transactions for the month of January. Do not close out
the manufacturing overhead account.
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131. Allenton Company is a manufacturing firm that uses job-order costing. At the beginning
of the year, the company's inventory balances were as follows:
Raw materials $26,000
Work in process $47,000
Finished goods $133,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-
hours. At the beginning of the year, the company estimated that it would work 31,000 machine-
hours and incur $248,000 in manufacturing overhead cost. The following transactions were
recorded for the year:
a. Raw materials were purchased, $411,000.
b. Raw materials were requisitioned for use in production, $409,000 ($388,000 direct and
$21,000 indirect).
c. The following employee costs were incurred: direct labor, $145,000; indirect labor, $61,000;
and administrative salaries, $190,000.
d. Selling costs, $148,000.
e. Factory utility costs, $12,000.
f. Depreciation for the year was $121,000 of which $114,000 is related to factory operations and
$7,000 is related to selling, general, and administrative activities.
g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was
29,000 machine-hours.
h. The cost of goods manufactured for the year was $783,000.
i. Sales for the year totaled $1,107,000 and the costs on the job cost sheets of the goods that
were sold totaled $768,000.
j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
Required:
Prepare the appropriate journal entry for each of the items above (a. through j.). You can assume
that all transactions with employees, customers, and suppliers were conducted in cash.
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132. Bakerston Company is a manufacturing firm that uses job-order costing. The company's
inventory balances were as follows at the beginning and end of the year:
Beginning Balance Ending Balance
Raw materials $14,000 $22,000
Work in process$27,000 $9,000
Finished goods $62,000 $77,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-
hours. At the beginning of the year, the company estimated that it would work 33,000 machine-
hours and incur $231,000 in manufacturing overhead cost. The following transactions were
recorded for the year:
• Raw materials were purchased, $315,000.
• Raw materials were requisitioned for use in production, $307,000 ($281,000 direct and $26,000
indirect).
• The following employee costs were incurred: direct labor, $377,000; indirect labor, $96,000; and
administrative salaries, $172,000.
• Selling costs, $147,000.
• Factory utility costs, $10,000.
• Depreciation for the year was $127,000 of which $120,000 is related to factory operations and
$7,000 is related to selling, general, and administrative activities.
• Manufacturing overhead was applied to jobs. The actual level of activity for the year was
34,000 machine-hours.
• Sales for the year totaled $1,253,000.
Required:
a. Prepare a schedule of cost of goods manufactured.
b. Was the overhead underapplied or overapplied? By how much?
c. Prepare an income statement for the year. The company closes any underapplied or
overapplied overhead to Cost of Goods Sold.
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133. Parker Company uses a job-order costing system and applies manufacturing overhead to
jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing
overhead and direct labor-hours were estimated at $50,000 and 20,000 hours, respectively, for
the year. In June, Job #461 was completed. Materials costs on the job totaled $4,000 and labor
costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company
worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing
overhead costs.
Required:
a. Job #461 contained 100 units. Determine the unit product cost that would appear on the job
cost sheet.
b. Determine the underapplied or overapplied overhead for the year.
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134. Hacken Company has a job-order costing system. The company applies manufacturing
overhead to jobs using a predetermined overhead rate based on direct labor cost. The
information below has been taken from the cost records of Hacken Company for the past year:
Direct materials used in production $1,250
Total manufacturing costs charged to production during the year (includes direct materials, direct labor, and
applied manufacturing overhead)
$6,050
Manufacturing overhead applied $2,800
Selling and administrative expenses $1,000
Inventories:
Direct materials, January 1 $130
Direct materials, December 31 $80
Work in process, January 1 $250
Work in process, December 31 $400
Finished goods, January 1 $300
Finished goods, December 31 $200
Required:
a. Compute the cost of direct materials purchased during the year.
b. Compute the predetermined overhead rate that was used during the past year.
c. Compute the Cost of Goods Manufactured for the past year.
d. Compute the unadjusted Cost of Goods Sold for the past year.
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135. Job 231 was recently completed. The following data have been recorded on its job cost
sheet:
Direct materials $52,260
Direct labor-hours 1,326 labor-hours
Direct labor wage rate $10 per labor-hour
Machine-hours 819 machine-hours
Number of units completed 3,900 units
The company applies manufacturing overhead on the basis of machine-hours. The
predetermined overhead rate is $11 per machine-hour.
Required:
Compute the unit product cost that would appear on the job cost sheet for this job.
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136. Job 397 was recently completed. The following data have been recorded on its job cost
sheet:
Direct materials $59,400
Direct labor-hours 1,254 DLHs
Direct labor wage rate $11 per DLH
Number of units completed 3,300 units
The company applies manufacturing overhead on the basis of direct labor-hours. The
predetermined overhead rate is $37 per direct labor-hour.
Required:
Compute the unit product cost that would appear on the job cost sheet for this job.
