Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November

Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November.

		Lynn		Brian		Mike
Direct materials		$600		$400		$200
Auditor labor costs		$5,400		$6,600		$3,375
Auditor hours		72		88		45

Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $50 per auditor hour. The Lynn job is the only incomplete job at the end of November. Actual overhead for the month was $11,000.

(a) Determine the cost of each job.

		Cost
Lynn		$
Brian		$
Mike		$

(b) Indicate the balance of the Service Contracts in Process account at the end of November.

Balance in service contracts in process account

$

(c) Calculate the ending balance of the Operating Overhead account for November.

Balance in operating overhead account

$

Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are direct labor cost $500,000

Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are direct labor cost $500,000, direct labor hours 50,000, and machine hours 100,000.

Compute the predetermined overhead rate for each activity base. (Round answers to 2 decimal places, e.g. 10.50.)

Overhead rate per direct labor cost			%
Overhead rate per direct labor hour		$
Overhead rate per machine hour		$

For Eckstein Company, the predetermined overhead rate is 130% of direct labor cost. During the month, Eckstein incurred $100,000 of factory labor costs, of which $85,000 is direct labor and $15,000 is indirect labor. Actual overhead incurred was $115,000.

Your answer is correct. Compute the amount of manufacturing overhead applied during the month. Manufacturing overhead applied

Your answer is correct. Determine the amount of under- or overapplied manufacturing overhead. Underapplied Overapplied  manufacturing overhead $

In January, Dieker Company requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700

In January, Dieker Company requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600. During January, time tickets show that the factory labor of $6,000 was used as follows: Job 1 $2,200, Job 2 $1,600, Job 3 $1,400, and general factory use $800.

Prepare the job cost sheets for each of the three jobs.

Job 1
Date		Direct Materials		Direct Labor
1/31

Job 2
Date		Direct Materials		Direct Labor
1/31

Job 3
Date		Direct Materials		Direct Labor
1/31

Sam Bowden believes actual manufacturing overhead should be charged to jobs. Do you agree?

Disagree Agree

Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $2,050,000

Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $2,050,000. The company used 1,000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $2,100,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to Job No. B12?

$2,050

$2,100

$105,000

$102,500

Norman Company manufactures customized desks. The following pertains to Job No. 953:

Direct materials used	$22,800
Direct labor hours worked	600
Direct labor rate per hour	$16.00
Machine hours used	400
Applied factory overhead rate per machine hour	$30.00

What is the total manufacturing cost for Job No. 953?

$44,400

$47,200

$50,400

$41,200

Barr Mfg. provided the following information from its accounting records for 2017:

Barr Mfg. provided the following information from its accounting records for 2017:

Expected production	60,000 labor hours
Actual production	56,000 labor hours
Budgeted overhead	$900,000
Actual overhead	$870,000

How much is the overhead application rate if Barr bases the rate on direct labor hours?

$14.50 per hour

$16.07 per hour

$15.00 per hour

$15.54 per hour

Manufacturing overhead is applied to each job

at the time when the overhead cost is incurred.

only if the overhead costs can be directly traced to that job.

at the end of the year when actual costs are known.

by means of a predetermined overhead rate.

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

actual overhead rate.

predetermined overhead rate.

estimated overhead rate.

assigned overhead rate.