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Chapter 4 Exercise 7
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 |? | |Estimated machine
hours |20,000 |? | |Overhead application rate |\$4.50 |\$5.00 | |Actual overhead
|\$110,000 |? | |Estimated overhead |? |\$90,000 | |Applied overhead |? |
\$86,000 | |Over- (under-) applied overhead
Division A:
Estimated Overhead = 20,000 * \$4.50
\$90,000.00
Applied Overhead = 22,500 * \$4.50
\$101,250.00
Under Applied Overhead = \$101,250 - \$110,000
-\$8,750.00 |? |\$6,500 | |Find the unknowns for each of the divisions.
Chapter 4 Problem 2
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 Process consisted of two jobs, no. 101 (\$20,400) and no. 103 (\$14,800).
During May, direct materials requisitioned from the storeroom amounted to \$96,500,
and direct labor incurred totaled \$114,500. These figures are subdivided as follows:
Direct Materials
Direct Labor
Job No.
Amount
Job No.
Amount
101

\$5,000
101
\$7,800
115
19,500
103
20,800
116
36,200
115
42,000
Other
35,800
116

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