Scribd
Upload
38 views5 pages

Chapter # 9 COST Accounting

This document contains questions and solutions related to cost accounting. It includes calculations of actual overhead, budgeted allowance, spending and idle capacity variances using data provided for various overhead allocation methods and rates. Predetermined overhead rates are calculated based on different allocation bases like direct labor hours, material cost, machine hours etc. Journal entries are provided for recording overhead.

Uploaded by

Farooq Khan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
38 views5 pages

Chapter # 9 COST Accounting

This document contains questions and solutions related to cost accounting. It includes calculations of actual overhead, budgeted allowance, spending and idle capacity variances using data provided for various overhead allocation methods and rates. Predetermined overhead rates are calculated based on different allocation bases like direct labor hours, material cost, machine hours etc. Journal entries are provided for recording overhead.

Uploaded by

Farooq Khan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

Chapter # 9

COST Accounting

Q2:

Data: actual FOH=43269


Budgeted Allowance = 43296/1,2,3 =352
Applied FOH= 37.350
ReQ :
Actual FOH =43296
Budget Allowance=35200
spending Variance=8096 (unfav)
Budgeted Allowance=35200
Applied FOH=37350
Idle capacity variance=2150 far
Q.3:
1.

=1508547=282000 D. L .hrs
2.=15010447=282000 D. L .hrs

Q.4:
1. FOH rate based on Material cost= Est FOH/ Est Mat Cost100
=540045000100=120 D.m cost
2. FOH rate based on units of production=EST FOH/Est units of prod
=54000/3600=$1.50 per unit
3. FOH rate based on machine hours=Est FOH/Est mach hrs=54000/1600=$33.75
4. FOH rate based on D.L cost = Est FOH/Est D.L cost
=54000/120000100=45% of D.L.cost
5.FOH rate based on D.L Hrs=Est FOH/Est D.L hrs=54000/2400=$2.25

Q5:
1. predetermined FOH on normal capacity
=Total FOH at N.c/Est D. L .Hrs at N.c =

(A)

Extra computation!
Variable portion of FOH Rate= ESt variable FOH/Set D.L hrs (expected)=54000/72000
=$0.75
Variable Experse=normal capacity (D. L .hrs) variable rate
At normal capacity = 90000.75=67500
Total FOH at N.C= F . Exp + v.exp=36000+67500=103500
(A)=> = 10.3500/90,000= 1.15 per D.L hr
2. Predetermined FOH rate on expected actual capacity
=total FOH at E.P./ Est D.L.hr
=36000+54000/72000 = 1.25/ D.L.hr
3.

Applied FOH normal Capi = rate actual D.L hr


=1.1575000=86250

4.

Applied FOH on expected actual capacity = actual D.L hrs FOH rate on EAX
=750001.25=93750

5.

First finding budgeted Allowance.


Variable Expense= Actual D.L .hrs variable Portion Of FOH rate
=750000.75=56250
Budgeted Allowance=F+V=36000+56250=92250
Now, Idle capacity variance,
Budgeted Allowance=92250
(-) Applied FOH =26250
Idle cap variance = 6000 UNfav

Q6 = (1) FOH rate = FOH/ D.L .hrs =

(80% = 8.75)
(85% = 8.53)

(2)

85%

Actual FOH

238000

90%
238000

100%
238000

Applied FOH:
(272008.33)

232016

(272008.33)

226576

(272008)

217600

Under Applied FOH 5984

Q 7: (1)

11424

Journal Entries

(a)

W.I.P ---------1160000
Material -----------1160000
(b) W.I.P ------------928000
Payroll -----------928000
C

FOH Control Acc ---------565300

D W.I.P ---------- 551,000


APP FOH ------------551000
App FOH ---- 551,000
FOH Control -------- 551,000
(2)

Actual FOH = 565300


(-) App FOH

= 551000 /

Under applied =14300

20400

Q8:

DATA:
Idle capacity variance = - (1266) FAV

(1)

Spending variance

= +779

Applied FOH

= 16234

Spending Variance
Budgeted Allowance

Unfav

= Actual FOH Budgeted Allowance


= Actual FOH Spending Variance

To find Budgeted Allowance first we have to find out actual FOH which in part (2) of the question.
So, we uses idle capacity Var for B.A.
Idle Cap Variance

B.A- App FOH

Budgeted Allowance

Idle capacity Variance + App FOH

= (1266) + 16234
=

Now,

14968

Actual FOH = budgeted Allowance + spending Variance


= 14968 + 779
= 15747

Q9: First finding budgeted Allowance,


Fixed FOH -------------- 400,000
Variable FOH (210,0001) ----------210,000
Budgeted Allowance
Spending Variance = actual FOH B.A
=631000-610000
= (20000) fav

610,000

Q10: To find Applied FOH, we first need to find variable portion of FOH rate & fixed portion.
Fixed portion of FOH rate = Est fixed FOH/Est D.l.hr = 171000/4750000=0.036
Variable Portion of FOH rate = 20900/4750000=0.044
Total Overhead Rate = 0.036+0.044=0.080
Now,
Actual FOH = 393000
(-)

Applied FOH = 400,000


Over applied FOH. (7000)
(2) homework

You might also like