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Assignment 2: Chapters 2 and 3 Assignment Help Save & Exit 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 20,000 direct labor-hours would be required for the period’s estimated level of p estimated $94,000 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 $123,900 and its actual total direct labor was 21,000 hours. 10 roduction. The company alsco Required he compan Round your answer to 2 decimal places per DLH
Expert Answer
1. The estimated total manufacturing overhead cost is computed as follows:
Y = $94,000 + ($2.00 per DLH)(20,000 DLHs) = 134,000
Estimated fixed manufacturing overhead $ 94,000
Estimated variable manufacturing overhead: $2.00 per DLH × 20,000 DLHs = 40,000
Estimated total manufacturing overhead cost $ 134,000
The predetermined overhead rate is computed as follows: Estimated total manufacturing overhead $134,000 ÷ Estimated total direct labor hours (DLHs) 20,000 DLHs = Predetermined overhead rate $ 6.7 per DLH
2. Actual Direct Labour hours = 10,800
x Predetermined overhead rate = $23.40
Manufacturing Overhead Applied = $2,52,720
3. Total Direct labour hours for Job A-500
Direct labor Cost (a) $153
Direct labor wage rate (b) $17 per hour
Total Direct labor hours (a) / (b) = 9
Total Manufacturing cost assigned to Job A-500
Direct Material 231
Direct Labor 153
Manufacturing overhead applied ($14 per direct labor hours x 9 hours ) 126
Total Manufacturing cost = $510
Unit product cost for Job A-500
Total Manufacturing cost (a)= $510
No. of units in the job (b) = 40 units
Unit product cost (a) / (b) = $12.75
Primare Corporation
Direct materials:
Raw materials inventory, beginning $12,000
Add: Purchases of raw materials 30,000
Total raw materials available 42,000
Less: Raw materials inventory, ending 18,000
Raw materials used in production 22,000
Less: Indirect materials included in manufacturing overhead 5,000 $17,000
Direct labor 58,000
Manufacturing overhead applied to work in process inventory 87,000
Total manufacturing costs 162,000
Add: Beginning work in process inventory 56,000
218,000
Less: Ending work in process inventory 65,000
Cost of goods manufactured $153,000
Primare Corporation
Schedule of Cost of Goods Sold
Finished goods inventory, beginning $35,000
Add: Cost of goods manufactured 153,000
Goods available for sale 188,000
Less: Finished goods inventory, ending 42,000
Unadjusted cost of goods sold 146,000
Add: Underapplied overhead 4,000
Adjusted cost of goods sold $150,000
