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Accounting Calculations - Assignment Example

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The manufacturing overhead was under applied by $8000. This was particularly because the actual costs exceed the budgeted overhead (Ross, 2013)…

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Subject: Finance & Accounting
Type: Assignment
Level: High School
Pages: 2 (500 words)
Downloads: 2
Author: rosenbaummaggie

Extract of sample "Accounting Calculations"

Accounting Calculations Wireless and Remote connectivity Challenge – Sanford QUESTION 1. Compute the company’s predetermined overhead rate (a) -Pre -Determined overhead rate Fixed Manufacturing Overhead 106,250.00 Basis of Allocation -Machine Hrs 85,000.00 1.25 Variable Manufacturing Overhead 0.75 Predetermined Overhead Rate 2.00 Question 2: Calculation of Overhead Costs Manufacturing Overhead Utilities 14,000.00 Budgeted Overhead 160,000.

00 Insurance 9,000.00 Maintainance 33,000.00 Indirect Materials 7,000.00 Indirect Labour 65,000.00 Depreciation 40,000.00 Under –Applied overheads 8000 168,000.00 168,000.00 Work -In -Progress Direct Material 530,000.00 Cost of goods sold 783,000.00 Direct Labour 85,000.00 Overheads 160,000.00 Under -Allocated Overheads 8,000.00 783,000.00 783,000.00 3. Computation of the Underapplied or Overapplied Overhead for the Year Under- applied (Over -Applied) indirect costs = Actual indirect costs incurred - Indirect costs allocated Actual Manufacturing Overhead 168,000.

00 Budgeted Manufacturing Overhead 160,000.00 Under (Over) Applied Overheads 8,000.00 4. Why the manufacturing overhead of the company was underapplied/ overapplied for the year The manufacturing overhead was under applied by $8000. This was particularly because the actual costs exceed the budgeted overhead (Ross, 2013). QUESTION 2 Solutions Equivalent Units Physical Units Direct Materials Conversion Costs Opening WIP (Pounds) 70,000.00 Started in May (Pounds) 350,000.

00 Total Units to Account For (Pounds) 420,000.00 Completed and Transferred Out (Pounds) 380,000.00 380,000.00 380,000.00 Ending WIP 40,000.00 30,000.00 10,000.00 Equivalent Units 420,000.00 410,000.00 390,000.00 Costs to Account For Work In Progress ($$) 122,000.00 86,000.00 36,000.00 Added During May ($$) 645,000.00 447,000.

00 198,000.00 767,000.00 533,000.00 234,000.00 Costs Incurred to Date ($$) 533,000.00 234,000.00 Equivalent Units 410,000.00 390,000.00 Cost/Equivalent Unit ($$) 1.30 0.60 Cost Assignment Completed and Transferred Out ($$) 722000 494000 228000 Ending WIP ($$) 45000 39000 6000 Total Costs to Account For ($$) 767,000.00 533,000.

00 234,000.00 References Ross, S.A. (2013). Fundamentals of Corporate Finance (10th ed.). New York, NY: McGraw-Hill Irwin.

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