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Managerial Accounting

Question 7
What does it mean when overhead is over- or underapplied? What costs are affected by this and what are the two different ways to adjust for the over- or underapplied amount?

Question 8
Aster Manufacturing uses the weighted-average method of process costing. The following information was available for the current year:

Number of units Production Costs
Beginning work-in-process (90% complete) 100,000 $ 540,000
Current period production 1,500,000 9,036,000
Ending work-in-process (90% complete) 40,000

Required:

A.How many total equivalent units were completed during the year?

B.What was the cost per equivalent unit?

C.What is the cost allocated to the ending work-in-process units?

D.What is cost of goods manufactured for the year?

Question 9
Triangle Catering assigns overhead to specific jobs based on direct labor hours. At the beginning of the current year, estimated overhead costs were $500,000 and estimated direct labor hours were 40,000. By the end of the year, actual overhead costs were calculated to be $525,000 and actual direct labor hours were 45,000.

Required:

A.Calculate the predetermined overhead rate.

B.How much overhead would be applied to a particular catering job that required 15 direct labor hours?

C.How much total overhead was applied during the year?

D.By how much was overhead over- or underapplied for the year? Be sure to indicate whether it was over- or underapplied.

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Solution Summary

The solution has problems relating to overhead calculations and calculation of equivalent units under process costing.

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