ACC 561 Wiley Plus Week 4 Exercises 15-5, 16-3, and 17-1

Exercise 15-5

Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $325,780 year, and machine usage is estimated at 125,300 hours.

year, $346,819 of overhead costs are incurred and 131,400 hours are used.

Exercise 16-3

The ledger of Custer Company has the following work in process account.

Production records show that there were 470 units in the beginning inventory, 30% complete, 1,560 units started, and 1,440 units transferred out. The beginning work in process had materials cost of $2,610 and conversion costs of $1,700. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Exercise 17-1

Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

Total estimated overhead costs are $301,200. Overhead cost allocated to the machining activity cost pool is $196,000, and $105,200 is allocated to the machine setup activity cost pool.