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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Con-Aggie Manufacturing Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead: $60,000; estimated materials costs, $50,000; estimated direct labor costs $60,000; estimated direct labor hours 10,000; estimated machine hours 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for the month of November was $75,000, and the production statistics on November 30 are as follows: Job 101: Materials Cost $5,000; Direct Labor Costs $6,000; Direct Labor Hours 1,000; Machine Hours 3,000; Date Jobs Completed November 10. Job 102: Materials Cost $7,000; Direct Labor Costs $12,000; Direct Labor Hours 2,000; Machine Hours 3,200; Date Jobs Completed November 14. Job 103: Materials Cost $8,000; Direct Labor Costs $13,500; Direct Labor Hours 2,500; Machine Hours 4,000; Date Jobs Completed November 20. Job 104: Materials Cost $9,000; Direct Labor Costs $15,600; Direct Labor Hours 2,600; Machine Hours 3,400; Date Jobs Completed: In process. Job 105: Materials Cost $10,000; Direct Labor Costs $29,000; Direct Labor Hours 4,500; Machine Hours 6,500; Date Jobs Completed November 26. Job 106: Materials Cost $11,000; Direct Labor Costs $2,400; Direct Labor Hours 400; Machine Hours 1,500; Date Jobs Completed: In process.
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1. Compute the predetermined rate, based on the following: a. direct labor cost, b. direct labor hours, c. machine hours.
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2. Using each of the methods, compute the estimated total cost of each job at the end of the month.
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3. Determine the under- or overapplied factory overhead, in total, at the end o fthe month under each of the methods.
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4. Which method would you recommend, and why?
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