From Tony Bell's Managerial Accounting Workbook

Tony’s Tables makes high-end, custom boardroom tables. The company applies overhead costs to jobs on the basis o
beginning of the year, the company estimated that its manufacturing overhead for the year would be $320,000. Also
its direct labour workforce would work 20,000 hours during the year.

During the year one of the jobs - Job #1843 showed the following cost information:
Walnut: 300 board feet used at a cost of $15 per board foot.
Labour: 240 hours at a cost of $20 per hour.
Required:
a.) Compute the cost of the job.
b.) Assuming the company marks up their price to by three times the cost, what will the company charge its c

A) Cost of a job
Direct Materials $ 4,500.00
Direct Labour $ 4,800.00
Manufacturing Overhead $ 3,840.00 PDOHR * Direct Labour Hours
Total job cost $ 13,140.00

PDHOR $ 16.00 Total est manufacturing overhead/ Total est activity

B) Marrkup $ 39,420.00
costs to jobs on the basis of direct labour hours. At the
would be $320,000. Also the company anticipated that

l the company charge its customer for the table?

Total est activity

From Tony Bell's Managerial Accounting Workbook

Jake’s Autobody is a car repair shop. The company uses direct labour cost as a basis for applying manufacturing ove
beginning of the year, the company estimated its annual overhead to be $140,000 and expected employees to work 20
rate of $12 per hour. During the year, employees actually worked 18,000 hours (at a wage rate of $12.25 per hour) an
overhead was $150,000.

Required:
a.) Compute the predetermined overhead rate.
b.) How much overhead would be applied to jobs during the year? By how much was overhead overapplied

PDOHR £ 0.58

Manufaturing Overhead Clearing A/C

£ 150,000.00 £ 128,625.00

Balance difference #NAME?

basis for applying manufacturing overhead costs to jobs. At the
0 and expected employees to work 20,000 hours at an average wage
(at a wage rate of $12.25 per hour) and the actual amount spent on

ow much was overhead overapplied or underapplied for the year?

head Clearing A/C

Applied overhead = PDOHR times Actual Hours times rate
Crafted Gift Solutions Limited (CGSL) manufactures a variety of exclusive gifts for children. CGSL purchases all the components
departments: assembly and finishing. Assembly is a labour intensive process and finishing is machine intensive. For 2022 CGS

Estimates for the year: Assembly

Overhead amount $ 409,600
Direct labour hours 128,400
DL rate per hour $ 18.00
Machine hours 5,780
PDOHR 3.19

During January 2022, CGSL received and started processing orders for 3 different gift items - train set, hot wheels truck and ex
Actuals for January: Trains
Number of cars 600
DM/Unit $ 43.00
DL hrs/unit - assembly 6.00
DL hrs/unit - finishing 3.00
Mach. Hrs/unit - assembly 0.50
Mach. Hrs/unit - finishing 1.00
% complete 75%

Assume the direct labour rate during January was the same as estimated at the beginning of the year. During the month, CGS
excavator, but it was only able to build 75% of the units for the train set order. During the month actual overhead incurred by
Actual overhead January:
Assembly $ 21,672.00
Finishing $ 25,140.00

Required:
1 Compute the prime costs incurred by each job during the month
2
Compute the amount of overhead that would have been applied to the jobs during the month.
3
Compute the total cost of the jobs completed during the month. What is the amount of work in process at the end of the
4
Compute the under or over-applied overhead for the month in each department and in total, labelling as appropriate. Ho
in its financial statements?

1 Prime Costs Trains Trucks Excavators

Direct Materials £ 19,350.00 £ 7,200.00 £ 5,700.00
Direct labour - Assembly £ 48,600.00 £ 14,400.00 £ 10,800.00
Direct Labour- Finishing £ 21,600.00 £ 4,800.00 £ 5,400.00
Total Prime Cost £ 89,550.00 £ 26,400.00 £ 21,900.00
2 Trains Trucks Excavators
MOH Applied Assembly £ 8,613.08 £ 2,552.02 £ 1,914.02
MOH Applied Finishing £ 15,748.77 £ 3,499.73 £ 12,599.01
£ 24,361.85 £ 6,051.75 £ 14,513.03

3 Total Costs Trains Trucks Excavators

£ 113,911.85 £ 32,451.75 £ 36,413.03
Cost of Jobs completed £ 68,864.78
Cost of Work In Progress Inventory £ 113,911.85

4 Assembly Finishing
MOH Actual $ 21,672.00 $ 25,140.00
MOH Applied £ 13,079.13 £ 31,847.50
Difference 8,592.87 - 6,707.50

Dr COGS 8,592.87
Cr. MOH Clearing Assembly 8,592.87
e gifts for children. CGSL purchases all the components (direct materials) but assembles and finishes the gifts in two
ocess and finishing is machine intensive. For 2022 CGSL has developed the following estimates:

Finishing
$ 637,650
46,600
$ 12.00
18,220
35.00

different gift items - train set, hot wheels truck and excavator - whose details are as follows:
Trucks Excavator
200 300
$ 36.00 $ 19.00
4.00 2.00
2.00 1.50
0.50 0.50
0.50 1.20
100% 100%

d at the beginning of the year. During the month, CGSL completed the entire order for both the Hot Wheels truck and
t order. During the month actual overhead incurred by each depart was:

o the jobs during the month.

What is the amount of work in process at the end of the month?

ch department and in total, labelling as appropriate. How should CGSL adjust the under or over-applied overhead amount
Number of item * DL per Unit (Assembly) * PDOHR * Percentage complete
Number of item * MH per Unit (Finishing)* PDOHR * Percentage complete