Problem 4-29

1 New Century Software Inc.

-It is job casting because costs here are identified with the services
provide from their softwares and data expertise and information fo
company from the oil & gas industry for the management of their
pipelines
- It is a global company, according to their website they are leading
source” global provider of technology-enabled asset protection sol
-Not harmful to the environment, since they provide safe & reliable
services

2
FedEx office
-Job casting because the casts can be identified with the shipments
logistic services that they provide. May it be for companies,oniline
or individuals to ship their packages to other people that can be ea
identified
-It is a well-known global company for logistic services, having man
branches around the world
-It can be harmful to the environment because of the transportatio
they use.
(e.g. car that produces smoke);the plastics they use for the package

3
TXI Cement (TXI)
-Process casting, they provide resources that are for construction li
cement, ready mixed concrete asphalt that are mostly produced
-It is not a global company since they only operate on the United S
-It is harmful for the environment because they are getting their re
from natural resources

4
Paramount Pictures
-Job casting, they offer professional services for filmmaking produc
and provides the things you needed that depends on what type of
film that you are making
-IT is a well-known global company for production of many differen
that are famous around the world
-It is harmful to the environment, since thy provide different sets an
design it based on what you want, they use materials like wood, pa
not properly used it can be harmful

5
Coca-Cola
-Process casting, they are known for mass production of different
beverages from soft drinks, juices, bottle water etc.
-It is a well-known global company over the years for their producti
beverages
-It is has many environmental issues because it contributes to plasti
pollution since they use a lot of plastic for the packaging of their pr
It also contributes to smoke pollution from factories.
Problem 4-30
1 Zurich Financial Services Group
- the company use job costing because they provide financial service. Each service requires
different processes that is why costing to each service they provide is done.
- The companyis a global company since it caters customers both local and global markets.
- Its nature of operation doesn't affect environmental issues but Zurich is commited to help
society transition and build resilience to climate risks

2 Reichhold Chemical Co.

- The company uses process costing because they manufacture chemicals.
- They are a global company because they supply unsaturated polyester resins for composites
around the world. To serve global customers, Reichhold has expanded into rapidly growing
markets that include India and China.
- the significant issue in its operation is that they manufacture chemicals that may be
harmful to the environment.

3 Nestle S.A.
- they use proces costing because they produce products which involve common processes.
- they are a global company because they supply products to almost all the countries in the
world.
- the significant environmental issue that Nestle have is plastic waste management.

4 Evian
- the company uses process costing method because the the nature of its operation is the
production of water in plastic bottles. It involves common process and they do mass
production of theyir product.
- it is just a multinational company
- the significant environmental issue that the company has in its operation is the production
of platic bottles but right now, vian’s™ commitment to make all of its plastic bottles from
100% recycled plastic is supporting the development of new technologies and better
behaviors that will encourage and enable plastic to be used over and over again within a
sustainable circular economy.
quires

rkets.
to help
Problem 4-31
1 Predetermined overhead rate for the year
=beginning of the year estimated factory overhead cost/ machine hours
= $1,980,000 / 66,000+ $30 per machine hours

2 Journal Entries
a. Purchased materials on account
Materials Inventory $ 900,000.00
Accounts Payable $ 900,000.00
Solution:
=180,000(pounds of material) x $5.00 (per pound)
= $900,000

b. Issued Materials to production

Work in Progress Inventory $ 600,000.00
Factory Overhead $ 75,000.00
Materials Inventory $ 675,000.00
Solution:
= issued pounds of materials to production x cost per pound
= 120,000 x $5.00 = $600,000.00
=pounds used as indirect materials x cost per pound
= 15,000 x $5.00 + $75,000.000

c. Incurred Direct Labor cost

Work in Progress Inventory $ 240,000.00
Factory Overhead $ 40,000.00
Accounts Payable $ 280,000.00

d. Depreciation of Equipment
Factory Overhead $ 75,700.00
Accumulated Depreciation $ 75,700.00

e. Insurance for the Manufacturing Property

Factory Overhead $ 3,500.00
Prepaid Insurance $ 3,500.00

f. Utilities and other miscellaneous items for the manufacturing plant

Factory Overhead $ 8,500.00
Cash $ 8,500.00

g. Completed jobs and transferred to finished goods inventory account

Finished goods inventory - job H11 $ 7,500.00
Finished goods inventory - job G28 $ 77,000.00
Work in progress inventory $ 84,500.00
 h. Shipped job G28 and invoiced at 35% above cost
Accounts Receivable $ 103,950.00
Cost of Goods sold $ 77,000.00
Sales $ 103,950.00
Finished goods inventory $ 77,000.00
Solution:
Job G28 cost x 35%
$77,000 x 35% = $26,950
$77,000 + 26,950= $103, 950

i. Overhead allocation for April - 7,700 machine hours

Work in Progress Inventory $ 231,000.00
Factory Overhead $ 231,000.00
Solution:
estimated factory overhead costs / use machine hours
1,980,000 / 66,000 = $30 per hour
7,700 x 30= $231,000

3 Actual Factory Overhead

Add all the debited factory overhead in prepared journals entries
$ 75,000.00
$ 40,000.00
$ 75,700.00
$ 3,500.00
$ 8,500.00
$ 202,700.00

Overapplied Overhead
Overhead allocation for April- Actual Factory Overhead
$ 231,000.00
$ 202,700.00
$ 28,300.00

Journal entry for overapplied overhead

Adjustment
477,00 for overapplied overhead for the month of April
Factory Overhead $ 12,000.00
Cost or goods sold $ 12,000.00
Problem 4-33
1. What is the total cost of Job A?
Direct Material $ 65,000.00
add: Direct Labor (4,2000x $8.50) $ 35,700.00
predetermined overhead (4,200x6.5) $ 27,300.00
($617,500/95,000 = $6.50 per labor hour)
$ 128,000.00

2. What is the total factory overhead applied during September?

Job A Overhead $ 27,300.00
(4,200 direct labor hours) ( $6.50 per labor hour)
Job Overhead B $ 22,750.00
(3,500 direct labor hrs) ($6.50 per labor hours)
$ 50,050.00

3. What is the overapplied or underapplied overhead for September?

Actual Overhead
Indirect Labor $ 13,500.00
Supervisory salaries $ 6,000.00
Factory Rent $ 7,000.00
Depreciation Cost- Factory $ 7,500.00
Indirect Materials Used $ 12,000.00
$ 46,000.00

Applied Overhead $ 50,050.00

Final Answer:
Over Applied By 4,050