Finance & Accounting
Pages 4 (1004 words)
Managerial Accounting 1) What Joe needs to understand is that employee salaries can be taken out of company expenses. The reason for this is because paying employees their wages is something that is important to the functioning of a business. For example, if a company has not paid its employees for a long period of time, then it is likely that those salaries would go under liabilities on the balance sheet.
This money would be classified as cash until the salaries are actually paid. At that point, salaries would come upon a specific salary section on the balance sheet or may even be considered a business expense and taken of the balance sheet altogether. 2) a) The predetermined overhead rate for the year is $5 per direct labor hour. (Manufacturing Overhead/ Direct Labor-hours) ($80,000/ 16,000) = $5 per direct labor hour. b) The amount of overhead charged to jobs during the year is $75,000. (Actual direct labor-hours * Predetermined overhead rate) (15,000 * $5) = $75,000 c) The amount of underapplied or overapplied overhead for the year is $3,000 underapplied. (Actual overhead costs – Applied overhead costs) ($78,000 - $75,000) = $3,000 d) The unit cost that would appear on the job cost sheet for Job #315 is $59. (Direct Materials + Direct Labor + Overhead applied)/ 100. ($1,500 + $2,400 + $2,000) = $5,900. $5,900/ 100 = $59. 3) $20,000 + $201,000 = $221,000. $221,000 - $35,000 = $186,000 4) a) TVC = $118,008/ 2,400 = $49.17. $49.17 * 2,500 = $122,925 b) TFC = $9,000/ 2,400 = $3.75. ...