# Woodman Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Estimated and actual data for direct labor and manufacturing overhead for last year are as follows: Estimated ActualDirect Labor Hours: 600,000 550,000 Manufacturing Overhead Estimated \$720,000 \$680,000

Explanation:

Giving the following information:

Estimated Actual

Direct Labor Hours: 600,000 550,000

Manufacturing Overhead Estimated \$720,000 \$680,000

I assume that we need to calculate the over/under applied overhead.

First, we need to determine  the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 720,000/600,000

Predetermined manufacturing overhead rate= \$1.2 per direct labor hour

Now, we apply overhead based on actual hours:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 1.2*550,000

Allocated MOH= \$660,000

Finally, the under/over applied overhead:

Under/over applied overhead= 680,000 - 660,000

## Related Questions

Pendergast, Inc., has no debt outstanding, and has a total market value of \$180,000. Earnings before interest and taxes (EBIT) are projected to be \$23,000 if economic conditions are normal. If there is a strong expansion in the economy, then EBIT will be 20% higher. If there is a recession, then EBIT will be 30% lower. Pendergast is considering a \$75,000 debt issue with a 7% interest rate. The proceeds will be used to repurchase shares of stock. There are currently 6,000 shares of stock outstanding, and the relevant tax rate is 35%. a- Calculate ROE and EPS under each of the economic scenarios before any debt is issued. b- Repeat part a, assuming that the company goes through with the capitalization. c- Calculate the percentage changes in EPS when the economy expands or enters a recession.

See the explanation below:

Explanation:

a- Calculate ROE and EPS under each of the economic scenarios before any debt is issued.

Under an expansion

Earnings before interest and taxes (EBIT) = \$23,000 * (100% + 20%) = \$27,600

Earnings after taxes = \$27,600 * (100% - 35%) = \$17,940

Return on equity (ROE) = Earnings after taxes / Total market value of equity = \$17,940 / \$180,000 =

0.0997, or 9.97%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = \$17,940 /

6,000 = \$2.99 per share

Under a recession

Earnings before interest and taxes (EBIT) = \$23,000 * (100% - 30%) = \$16,100

Earnings after taxes = \$16,100 * (100% - 35%) = \$10,465

Return on equity (ROE) = Earnings after taxes / Total market value of equity = \$10,465 / \$180,000 =

0.0581, or 5.81%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = \$10,465 /

6,000 = \$1.74 per share

b- Repeat part a, assuming that the company goes through with the capitalization.

Under an expansion

Earnings before interest and taxes (EBIT) = \$23,000 * (100% + 20%) = \$27,600

Interest on debt = \$75,000 * 7% = \$5,250

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Earnings after interest = \$27,600 - \$5,250 = \$22,350

Earnings after taxes = \$22,350 * (100% - 35%) = \$14,527.50

Return on equity (ROE) = Earnings after taxes / Total market value of equity = \$14,527.50/ \$180,000 =

0.0807, or 8.07%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = \$14,527.50 /

6,000 = \$2.42 per share

Under a recession

Earnings before interest and taxes (EBIT) = \$23,000 * (100% - 30%) = \$16,100

Interest on debt = \$75,000 * 7% = \$5,250

Earnings after interest = \$16,100 - \$5,250 = \$10,850

Earnings after taxes = \$10,850 * (100% - 35%) = \$7,052.50

Return on equity (ROE) = Earnings after taxes / Total market value of equity = \$7,052.50 / \$180,000 =

0.0392, or 3.92%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = \$7,052.50 /

6,000 = \$1.18 per share

c- Calculate the percentage changes in EPS when the economy expands or enters a recession.

Percentage change under expansion = (\$2.42 - \$2.99)/\$2.99 = 0.1902 decrease, or 19.02% decrease.

Percentage change under recession = (\$1.18 - \$1.74)/ \$1.74 = 0.3218 decrease, or 32.18% decrease

Most voluntary changes in accounting principles are reported retrospectively. This means for each year reported in the comparative statements, we make those statements appear as if the newly adopted account­ing method had been applied all along. A journal entry is created to adjust all account balances affected as of the date of the change. In the first set of financial statements after the change, a disclosure note describes the change and justifies the new method as preferable. It also describes the effects of the change on all items affected, including the fact that the retained earnings balance was revised in the statement of shareholders’ equity.Melas Company changed from the LIFO to the FIFO inventory costing method on January 1, Year 3. Inventory values at the end of each year since the inception of the company are as follows:

FIFO LIFO
Year 1 \$195,000 \$177,500
Year 2 \$390,000 \$355,000

Ignoring income tax considerations, prepare the appropriate journal entry, dated January 1, Year 3, to report this accounting change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation: times all the number together

The amount of money that a seller is willing to accept in exchange for a product, at a given time and under given circumstances, is called the A) revenue.
B) income
C) discount. price.
E) breakeven quantity.

D. Price

Explanation:

Price is the amount that is paid by the buyer to the seller in the purchase of the product. And it also deals in exchange for a product which we called barter. The more or less amount while exchange the product is also known as price

It is a measure of an item.

According to the given situation, the most appropriate option is d. as it says that the seller is willing to accept in a given time and in given circumstances that means he is ready for negotiation.

Companies that achieve Value Innovation a. pursue differentiation and low cost simultaneously b. pursue differentiation or low cost c. pursue differentiation or low price d. None of the above

Answer: a. pursue differentiation and low cost simultaneously

Explanation:

Value Innovation as a strategy is highly sought after in many industries as it represents an opportunity to acquire more market share whist keeping costs low. This is because with Value innovation, a company invests in technology that will achieve both low costs and differentiation simultaneously.

This is great news for both consumers and the company because consumers get to buy more differentiated products at lower prices and for the company, they will get more customers buying from their brand.

​Jensen's Travel Agency has a 7 percent preferred stock outstanding that is currently selling for​ \$48 a share. The preferred stock has a​ \$100 par value. The market rate of return is 10 percent and the​ firm's tax rate is 34 percent. What is the​ Jensen's cost of preferred​ stock?

\$20.83

Explanation:

The computation of the cost of preferred stock is shown below:

Cost of preferred stock = (Dividend × par value) ÷ (current selling price) × 100

= (10% × 100) ÷ (\$48) × 100

= 10 ÷ 48 × 100

= \$20.83

Simply we divide the dividend by the current selling price so that the cost of preferred stock can be computed

All other information which is given is not relevant. Hence, ignored it

Data concerning a recent period’s activity in the Prep Department, the first processing department in a company that uses process costing, appear below: Materials Conversion Equivalent units in ending work in process inventory 2,200 940 Cost per equivalent unit \$ 15.26 \$ 6.13 A total of 20,200 units were completed and transferred to the next processing department during the period. Required: 1. Compute the cost of ending work in process inventory for materials, conversion, and in total. 2. Compute the cost of the units completed and transferred out for materials, conversion, and in total. (Round your final answers to the nearest whole dollar amount.)

total ending WIP value        39,334.20

transferred-out                   432.078.00

Explanation:

Ending work in proces inventory

we multiply the equivalent units by the cost per equivlent unit

materials 2,200 x 15.26  =  33,572

converion  940  x   6.13  =    5,762.2

then, we add them to get thetotal value of the ending WIP

total ending WIP value     39,334,2‬

for the transferred out, we add both equivalent cost as this are complete.

And multiply by the whole amount 20,200

trasnferred out: 20,200 x (15.26 + 6.13) = 432.078