# Managerial Accounting Essay

2321 Words Oct 29th, 2013 10 Pages
PROBLEM 2-21B Predetermined Overhead Rate; Disposition of Underapplied or Overapplied Overhead (LO1, LO7)
CHECK FIGURE
(2) Underapplied: \$68,600

Adriana Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

Computer-hours
82,000
\$1,278,000
\$3.40

During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company’s
Assume all raw materials are used in production as direct materials.
3. Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)
4. Job 453 was started and completed during the year. What price would have been charged to the customer if the job required \$3,300 in materials and \$4,900 in direct labor cost, and the company priced its jobs at 40% above the job’s cost according to the accounting system?
5. Direct labor made up \$8,700 of the \$36,000 ending Work in Process inventory balance. Supply the information missing below:

Direct materials
\$ ?
Direct labor
8,700
Work in process inventory
\$36,000

PROBLEM 2-25B Journal Entries; T-Accounts; Financial Statements (LO1, LO2, LO3, LO4, LO5, LO6, LO7)
CHECK FIGURE
(3) Cost of goods manufactured: \$555,000
(6) Price per unit: \$45.71

Mariya Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated \$221,200 of manufacturing overhead for an estimated allocation base of \$158,000 direct material dollars. The following transactions took place during the year (all purchases and services were acquired on account):
a. Raw materials purchased, \$145,000.
b. Raw

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