Problem 1
Factory overhead for the Praeger Company has been estimated as follows:
|
Nonvariable overhead
|
$122,500
|
|
Variable overhead
|
$90,000
|
|
|
|
|
Budgeted direct labor hours
|
42,500
|
Production for the month was 90 percent of the budget, and actual factory overhead totaled $175,000.
Calculate:
a. The predetermined factory overhead rate.
b. The under- or overapplied factory overhead.
Problem 2
The Tidle Manufacturing Company uses a job order cost system. Factory wages are paid on a straight hourly basis with indirect labor getting $8.50 an hour and direct labor getting $10.00 an hour.
During the week of January 7, the following hours were worked:
|
|
Direct
|
Indirect
|
|
Cutting Department
|
2,200
|
250
|
|
Splicing Department
|
2,400
|
200
|
|
Sanding Department
|
1,850
|
125
|
|
Joining Department
|
4,250
|
325
|
Salaries and wages are paid weekly, with administrative salaries totaling $16,500 and salesperson's salaries totaling $12,200.
The following deductions are to be considered:
|
FICA tax
|
8.0%
|
|
Federal income tax
|
12.0%
|
|
State income tax
|
2.0%
|
|
Federal unemployment tax
|
1.0%
|
|
State unemployment tax
|
5.0%
|
Prepare journal entries to record:
a. The payroll.
b. The payment of the payroll.
c. The payroll distribution.
d. The employer's payroll tax expense.
Problem 3
The Outdoor Manufacturing Company produces sporting equipment. The company maintains a single raw materials inventory account for both direct and indirect materials. The following information came from the factory ledger accounts for December:
|
Raw Materials, December 1
|
$ 45,500
|
|
Work in Process, December 1
|
125,000
|
|
Finished Goods, December 1
|
175,000
|
|
Raw materials purchases (during December)
|
623,000
|
|
Direct labor
|
435,000
|
|
Repairs and maintenance
|
37,200
|
|
Indirect materials
|
16,700
|
|
Utilities
|
63,200
|
|
Indirect labor
|
38,200
|
|
Supervisors' salaries
|
18,300
|
|
Raw Materials, December 31
|
43,600
|
|
Work in Process, December 31
|
135,000
|
|
Finished Goods, December 31
|
150,000
|
Compute the cost of direct materials used during the month of December.