# Q:6 The accountant of dell company is asked by management to compute FOH rate based on (a) normal

capacity, (b) expected actual capacity (c) theoretical capacity (d) average sale of the previous three year.
The accountant prepared the following summary.

capacity level
direct labour hours
FOH
FIXED
VARIABLE
toal

expected
average
normal
theoretical
actual
sale
capacity
capacity
80%
85%
90%
100%
27200
23900
30600
34000
102000
136000
238000

102000
144500
246500

102000
153000
255000

102000
170,000
272000

Required: 1) FOH rate per Direct labor hours for each capacity level (2) the amount of over or under
applied FOH cost.
Q: 6 (1)
F(FOH)
v(FOH
T(FOH)
2)
A(FOH)
A(FOH)
A) 27200 × 8.53
b) 27200 × 8.33
c) 27200 × 8.00
under obserbed FOH

80%
3.75
5
8.75

85%
3.53
5
8.53

90%
3.33
5
8.33

100%
3
5
8

85%
238000

90%
238000

100%
238000

232016
226576
5984

11424

217600
20400

160. assembles and sells electric mixers. Speedo Co. All parts are purchased and labor is paid on the baisis of \$32 per mixer assembled. 29000 mixers were assembled and actual FOH was 565.000 Depreciation -------------------------------------------------------------------------25000 Miscellaneous ----------------------------------------------------------------------55000 During the period.000/30000 = 19 per mixer 2) Under applied FOH 565300 Less 551000 14300 .Q:7 entries for factory overhead.000 mixers. etc 565300 WIP A(FOH) 551000 A(FOH) FOH 551000 928000 29000 × 40 29000 × 32 565300 551000 19 × 29000 551000 overhead rate = estimated FOH/Estimated production = 570. Indirect material---------------------------------------------------------------------220. The cost of the parts per mixer total \$40 .300.160.000 WIP Payroll 928000 FOH Material.000 Light and power --------------------------------------------------------------------30.000 Indirect labor ------------------------------------------------------------------------240. based on a production of 30. Estimated FOH for the coming period. Q:7 (1) WIP Material 1. the unit cost basis for applying FOH is used.000 1. These units were completed but not yet transferred to the finished goods storeroom. pyaroll. as the company handles only this one product. is as follows.

and actual factory overhead expenditures were \$631.00 predetermined factory overhead rate. The Henkel company made the following data available from its accounting records and reports: a) = 3. (1) budgeted allowance. Q:9 A(FOH) S(V) Budget allowance IC(V) AP(FOH) Underapplied FOH (631. c) During the year. \$779 units unfavorable and applied FOH \$16234. spending variance.Q:8 Variance analysis procedure.000 21000 UF 600000 × 2/3 . \$1266 favorable. however. the company worked 210. The kreiter company was totally destroyed by fire during june.000 Required: the spending and idle capacity variances. Q:8 A(FOH) 15745 S(V) 779 UF Budget allowance 14968 IC(V) -1266 F AP(FOH) 16234 Q:9 variance analysis.000 F 630000 1000 .000 630000) 63100 610.000 direct labor hours. b) Further analysis indicates that one third of the rate is variable – cost oriented.210000 -20. (2) actual factory overhead. based on capacity utilized. Required. certain fragments of its cost records were recovered with the following data: idle capacity variance.

Actual overhead totaled \$58000. The following data were obtained from the company’s cost record’s cost records as of June 30. 1002. During june. 1005 were completed.Goods WIP 250100 250100 JOB NO D/M 1001 1002 1003 1004 1005 D/L 16300 23600 24500 15400 18200 98000 FOH 13800 28200 25200 15000 19200 101400 C.G. Jobs 1001 and 1002 were shipped out. Required: general journal entries to summarized the transaction for june. Q:9. and the customers were billed in the amounts of 48000 and \$82000 respectively.000 37000 65900 62300 37900 47000 250100 . Factory overhead is charged to jobs on the basis of \$3 per direct labor hour. jobs 1001. job order costing.000 Total 6900 14100 12600 7500 9600 50700 102900 130. The Evert company uses job order costing.1 journal entries.G 102900 A/R SALEA 130.Sold F.Q9.1 WIP Material payroll FOH 281620 111700 113280 56640 FOH Various credit 58000 58000 F. 1003. 1004. Over – or – under applied factory overhead is not closed out until the end of the year. Job no direct materials direct labor hours 1001 16300 2300 1002 23600 4700 1004 24500 4200 1005 18200 3200 1006 13700 1080 Direct labor is charged to jobs at an overage cost of \$6 per direct labor hour.

14800 for 3700 hours) Solution: (1) (a) (2) (a) × 100 = 170% of labor cost (b) = 4 per hours (c) × 100 = 50% M 14800 × 170% = 25160 (b) 3700 hrs × 4 = 14800 (c) 21000 × 50% = 10500 . (job 465 material cost . factory overhead. materials cost. labor cost. labor cost. (2) the amount of overhead to be charged to job 465 by each rate in (1) above . and (c) material cost.Q:4 FOH rate and application.000. 20800 cases. \$850. The cost department of the bundy company made the following estimates for the coming year.000 production. \$280. \$425000. total hours. 106250 Required: (1) the factory overhead rate based on (a) labor cost (b) labor hours. \$21000.