Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 2, Problem 22E
Ellerson Company provided the following information for the last calendar year:
During the year, direct materials purchases amounted to $278,000, direct labor cost was $189,000, and overhead cost was $523,000. During the year, 100,000 units were completed.
Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of $1,312,000 and had selling and administrative expenses of $204,600.
Required:
- 1. What is the cost of goods sold for last year?
- 2. Prepare an income statement for Ellerson for last year.
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Winston Company estimates that the factory overhead for the following year will be $675,400. The company has decided that the basis for applying
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Winston Company estimates that the factory overhead for the following year will be $675,400. The company has decided that the basis for applying
factory overhead should be machine hours, which is estimated to be 30,700 hours. The total machine hours for the year were 54,100. The actual facto
overhead for the year was $1,183,000.
a. Determine the total factory overhead amount applied. Round to the nearest dollar.
b. Compute the over- or underapplied amount for the year. Enter the amount as a positive number.
C. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it
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Winston Company estimates that the factory overhead for the following year will be $833,900. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 26,900 hours. The total machine hours for the year were 54,000 hours. The actual factory overhead for the year was $1,697,000.
Required:
a.
Determine the total factory overhead amount applied.
b.
Compute the overapplied or underapplied amount for the year. Enter the amount as a positive value.
c.
Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Chapter 2 Solutions
Cornerstones of Cost Management (Cornerstones Series)
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