This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Account
Dec. 31, 2014
Account
Balance
(Before
Proration)
(1)
Allocated
Manuf.
Overhead in
Dec. 31, 2014
Balance
(Before
Proration)
(2)
Allocated Manuf.
Overhead in
Dec. 31, 2014
Balance as a
Percent of Total
(3) = (2) ÷ $114,000
Proration of $3,000
Underallocated
Manuf. Overhead
(4) = (3)
$3,000
Dec. 31, 2014
Account
Balance
(After
Proration)
(5) = (1) + (4)
WIP
$ 50,700
$ 10,260a
0.09
0.09
$3,000 = $ 270
$ 50,970
Finished Goods
245,050
29,640b
0.26
0.26
$3,000 = 780
245,830
Cost of Goods Sold
549,250
74,100c
0.65
0.65
$3,000 = 1,950
551,200
Total
$845,000
$114,000
1.00
$3,000
$848,000
a,b,c Overhead allocated = Direct manuf. labor cost
50% = $20,520; $59,280; $148,200
50%
4. Writing off all of the underallocated manufacturing overhead to Cost of Goods Sold (CGS) is
usually warranted when CGS is large relative to Work-in-Process and Finished Goods Inventory
and the underallocated manufacturing overhead is immaterial. Both these conditions apply in this
case. ROW should write off the $3,000 underallocated manufacturing overhead to Cost of Goods
Sold Account.
overhead rate
1. Budgeted manufacturing
=
Budgeted manufacturing overhead cost
Budgeted direct manufacturing labor cost
$125,000 50% of direct manufacturing labor cost
$250,000
==
4-31 (20−30 min) Job costing, accounting for manufacturing overhead, budgeted rates.
The Pisano Company uses a job-costing system at its Dover, Delaware, plant. The plant has a
machining department and a finishing department. Pisano uses normal costing with two direct-cost
categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost
pools (the machining department with machine- hours as the allocation base and the finishing
department with direct manufacturing labor costs as the allocation base). The 2014 budget for the
plant is as follows:
Machining Department
Finishing Department
Manufacturing overhead costs
$9,065,000
$8,181,000
Direct manufacturing labor costs
$ 970,000
$4,050,000
Direct manufacturing labor-hours
36,000
155,000
Machine-hours
185,000
37,000
Required:
1. Prepare an overview diagram of Pisano’s job-costing system.
2. What is the budgeted manufacturing overhead rate in the machining department? In the
finishing department?
3. During the month of January, the job-cost record for Job 431 shows the following:
Budgeted indirect
Budgeted total costs in indirect cost pool
Trusted by Thousands of
Students
Here are what students say about us.
Resources
Company
Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.