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The following data is available for Sykes Company, a small manufacturing firm, for the mon

The following data is available for Sykes Company, a small manufacturing firm, for the mon

The following data is available for Sykes Company, a small manufacturing firm, for the month of

October:

Actual manufacturing overhead costs incurred $58,000

Manufacturing overhead Allocated to jobs56,000

Under allocated manufacturing overhead$2,000

Assume that the amount of under allocated manufacturing overhead is not material.

Sykes Company will dispose of the under allocation by:

A) Increasing cost of goods sold by $2,000

B) Decreasing cost of goods sold by $2,000

C) Reducing cost of goods manufactured by $2,000

D) Decreasing cost of goods manufactured by $2,000

47) The following data is available for Sykes Company, a small manufacturing firm, for the month of

October:

Manufacturing overhead Allocated to jobs$56,000

Actual manufacturing overhead costs incurred58,000

Over allocated manufacturing overhead$2,000

Assume that the amount of under allocated manufacturing overhead is not material.

Sykes Company will dispose of the under allocation by:

A) Increasing cost of goods sold by $2,000

B) Decreasing cost of goods sold by $2,000

C) Reducing cost of goods manufactured by $2,000

D) Decreasing cost of goods manufactured by $2,000

48) The following data is available for Sykes Company, a small manufacturing firm, for the month of

October:

Actual manufacturing overhead costs incurred$158,000

Manufacturing overhead Allocated to jobs108,000

Under allocated manufacturing overhead$50,000

At the end of the month the accounting records indicate:

Jobs still in Work in Process 30%

Jobs still in Ending Inventory20%

Jobs completed and sold50%

Assume that the amount of under allocated manufacturing overhead is considered material.

Indicate the direction (increase/decrease) and amount of the adjustment Sykes Company will make, to dispose of the under allocation, to each of the following inventory accounts:

Work in Process: __________________________________________________

Ending Inventory: _________________________________________________

Cost of Goods Sold: ________________________________________________

49) The following data is available for Sykes Company, a small manufacturing firm, for the month of

October:

Manufacturing overhead Allocated to jobs $108,000

Actual manufacturing overhead costs incurred 158,000

Over allocated manufacturing overhead$50,000

At the end of the month the accounting records indicate:

Jobs still in Work in Process 30%

Jobs still in Ending Inventory20%

Jobs completed and sold.50%

Assume that the amount of under allocated manufacturing overhead is considered material.

Indicate the direction (increase/decrease) and amount of the adjustment Sykes Company will make, to dispose of the under allocation, to each of the following inventory accounts:

Work in Process: __________________________________________________

Ending Inventory: _________________________________________________

Cost of Goods Sold: ________________________________________________

50) FreeBake produces pie crusts and tart shells. The company allocates manufacturing overhead based on the machine hours each job uses. FreeBake reports the following cost data for the past year.

 

BUDGET

ACTUAL

Direct labour hours

14,000 hours

12,800 hours

Machine hours

13,500 hours

12,600 hours

Depreciation on salespeople's autos

$26,000

$26,000

Indirect materials

98,000

104,000

Depreciation on delivery trucks

26,000

28,000

Depreciation on plant and equipment

127,000

134,000

Indirect manufacturing labour

80,000

86,000

Customer service hotline

38,000

42,000

Plant utilities

36,000

40,000

Direct labour cost

140,000

170,000

Required:

1. Compute the predetermined overhead rate.

2. Calculate the allocated Manufacturing Overhead for the past year.

3. Compute the under allocated or over allocated Manufacturing Overhead.

4. How will this under allocated or over allocated Manufacturing Overhead be disposed of?

 

 

 

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Tripti 07-Dec-2019

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