Exercise 3-1

Estimated DL Hours 40,000

Fixed M O/H in total $ 466,000
Variable M O/H per hour $ 3.00
Actual M O/H $ 713,400
Actual DL Hours 41,000

Compute the company's predetermined OH for the year

Fixed M O/H
Estimated DL Hours
Variable M O/H per hour
Total M O/H per hour
Exercise 3-2

Predetermined M O/H rate $ 23.10

Estimated Total M O/H $ 277,200
Estimated DL Hours 12,000
Actual M O/H $ 266,000
Actual DL Hours 12,600

Determine applied OH for the year

Actual DL Hours
Predetermined M O/H rate
Applied M O/H
Exercise 3-3

Predetermined M O/H rate $ 18.00

DL wage rate $ 12.00
Job A-200 information
Direct Materials $ 200
Direct Labor $ 120
DL Hrs in Job A-200 10
1. What is the total manufacturing cost assigned cost assigned to Job A-200

Direct Materials
Direct Labor
Manufacturing Overhead
Total Mfg. Cost

2. If Job A-200 consists of 50 units, what is the average cost of each unit

Units produced in A-200 50

Average unit cost
Exercise 3-4

General Journal
Debit Credit
Exercise 3-5

Cash Raw Material Work in Process Finished Goods

Manufacturing Overhead Cost of Goods Sold

Exercise 3-6

Schedule of Cost of Goods Manufactured and Cost of Goods Sold

Direct Materials:
Beginning raw material
Purchases of raw material
Raw material available
Ending raw material
Raw material used in production
Less indirect material charged to overhead
Direct materials used
Direct labor
Manufacturing overhead applied to work in process
Current period manufacturing cost
Add: beginning work in process

Deduct: ending work in process

Cost of goods manufactured

Beginning finished goods inventory

Cost of goods manufactured
Cost of goods available for sale
Deduct: ending finished goods inventory
Unadjusted cost of goods sold
Underapplied overhead
Cost of goods sold
Exercise 3-7

1. Determine under- or overapplied manufacturing overhead

Predetermined overhead rate

Estimated total manufacturing overhead
Estimated direct labor hours
Actual overhead incurred
Actual direct labor hours

Applied overhead
Actual overhead
Overapplied overhead

2.
Exercise 3-14

1. Using the high-low method, estimate fixed overhead cost per quarter and the
variable overhead rate per unit; create a cost formula to estimate total overhead.

Mfg. O/H Cost Total Units

High activity level (quarter one)
Low activity level (quarter three)
Change in cost and units

Change in cost
Change in units
Varible cost per unit (b)

Fixed cost in total (a)

y = 180,000 + .60 x

Compute total manufacturing cost and per unit cost for quarter 4
Quarter 4 production 60,000
y = 180,000 + .60 (60,000)
b=
a=
Estimated quarter 4 cost

Direct materials
Direct labor
Manufacturing overhead
Total quarter 4 manufacturing cost
Quarter 4 unit product cost

2.

3.

Fixed overhead for the year

Variable overhead for the year
Total overhead for the year
Annual production
Manufacturing overhead per unit
Exercise 3-18

1(a). Compute the predetermined plantwide overhead rate.

Fixed manufacturing overhead 1,100,000

Variable manufacturing overhead rate per MH 5.00
Machine hours estimated to be worked 50,000

Fixed manufacturing overhead

Variable manufacturing overhead
Total overhead
Overhead rate per MH
MH run for Job D-75
MH run for Job C-100

1(b) and (c) Total manufacturing costs assigned to D-75 and C-100 and bid prices
Job D-75 Job C-100
Direct Materials
Direct Labor
Manufacturing Overhead

Markup percentage on manufacturing cost 150% 150%

Bid price

1(d)

2(a) Compute the predetermined departmental overhead rates:

Molding Fabrication
Fixed Overhead
Machine Hours
Fixed overhead per MH
Variable overhead per MH
Total overhead per MH

Job D-75 Job C-100

Molding department MH 15,000 5,000
Fabrication department MH 5,000 25,000

2(b) and (c) Compute the total manufacturing costs assigned to Job D-75 and C-100
Job D-75 Job C-100
Direct Materials
Direct Labor
Molding department overhead
Fabrication department overhead
Total manufacturing costs

Markup percentage on manufacturing cost 150% 150%

Bid price

2(d)

3.
Exercise 3A-1

2,010 2,011
Estimated professional staff hours 2,400 2,250
Estimated overhead costs $ 144,000 $ 144,000
Professional staff hours available (capacity) 3,000 3,000

1. Overhead cost applied to Ms. Miyami's account based on 5 hours of professional staff time.

Overhead rate per staff hours

Professional hours used
Overhead chared to Ms. Miyami's account

2.

Predetermined overhead rate

Actual hours charged to clients' accounts
Applied overhead
Actual overhead incurred (assumption)
Over- or underapplied overhead

3. If the company bases the predetermined overhead rate on the professional hours "available"
what cost would have been applied to Ms. Miyami's account?

Overhead rate per staff hours

Professional hours used
Overhead chared to Ms. Miyami's account

4. If the company bases predetermined overhead rate on professional hours available and
actual hours worked were as estimated (2,400 & 2,250) what would over-or underapplied overhead be?

Predetermined overhead rate

Actual hours charged to clients' accounts
Applied overhead
Actual overhead incurred (assumption)
Over- or underapplied overhead