Week Three Assignment Principles Of Acc

ACC 206 Week Three Assignment

Please complete the following five exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.

1. Overhead application: Working backward
The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review:

Division A
Division B
Actual machine hours
22,500
17,200
Estimated machine hours
20,000
18,000
Overhead application rate
$4.50
$5.00
Actual overhead
$110,000
$92,500
Estimated overhead
$90,000
$90,000
Applied overhead
$101,250
$86,000
Over- (under-) applied overhead
$-8750
$6,500
Find the unknowns for each of the divisions.
Division A
Estimated Overhead= Estimated Machine Hours * Overhead Application Rate
Estimated Overhead= 20,000 * $4.50
Estimated Overhead= $90,000
Applied Overhead= Actual Machine Hours * Overhead Application Rate
Applied Overhead= $22,500 * $4.50
Applied Overhead= $101,250
Over- (Under-) Applied Overhead= Applied Overhead- Actual Overhead
Over- (Under-) Applied Overhead= $101,250- $110,000
Over- (Under-) Applied Overhead= -8750
Division B
Actual Machine Hours= Applied Overhead/ Overhead Application Rate
Actual Machine Hours= $86,000/ $5.00
Actual Machine Hours= 17,200
Estimated Machine Hours= Estimated Overhead/ Overhead Application Rate
Estimated Machine Hours= $90,000/ $5.00
Estimated Machine Hours= 18,000
Actual Overhead= Applied Overhead+ Over-(Under-) Applied Overhead
Actual Overhead= $86,000 + $6,500
Actual Overhead= $92,500

2. Computations using a job order system
General Corporation employs a job order cost system. On May 1 the following balances were extracted from the general ledger;

Work in process $ 35,200
Finished goods 86,900
Cost of goods sold 128,700

Work in