# Accounting calculations

Accounting Calculations Wireless and Remote connectivity Challenge – Sanford QUESTION 1. Compute the company’s predetermined overhead rate
106, 250. 00
Basis of Allocation -Machine Hrs
85, 000. 00
1. 25
0. 75
2. 00
Question 2: Calculation of Overhead Costs
Utilities
14, 000. 00
160, 000. 00
Insurance
9, 000. 00
Maintainance
33, 000. 00
Indirect Materials
7, 000. 00
Indirect Labour
65, 000. 00
Depreciation
40, 000. 00
8000
168, 000. 00
168, 000. 00
Work -In -Progress
Direct Material
530, 000. 00
Cost of goods sold
783, 000. 00
Direct Labour
85, 000. 00
160, 000. 00
8, 000. 00
783, 000. 00
783, 000. 00
3. Computation of the Underapplied or Overapplied Overhead for the Year
Under- applied (Over -Applied) indirect costs = Actual indirect costs incurred – Indirect costs allocated
168, 000. 00
160, 000. 00
8, 000. 00
4. Why the manufacturing overhead of the company was underapplied/ overapplied for the year
The manufacturing overhead was under applied by \$8000. This was particularly because the actual costs exceed the budgeted overhead (Ross, 2013).
QUESTION 2
Solutions
Equivalent Units
Physical Units
Direct Materials
Conversion Costs
Opening WIP (Pounds)
70, 000. 00
Started in May (Pounds)
350, 000. 00
Total Units to Account For (Pounds)
420, 000. 00
Completed and Transferred Out (Pounds)
380, 000. 00
380, 000. 00
380, 000. 00
Ending WIP
40, 000. 00
30, 000. 00
10, 000. 00
Equivalent Units
420, 000. 00
410, 000. 00
390, 000. 00
Costs to Account For
Work In Progress (\$\$)
122, 000. 00
86, 000. 00
36, 000. 00
645, 000. 00
447, 000. 00
198, 000. 00
767, 000. 00
533, 000. 00
234, 000. 00
Costs Incurred to Date (\$\$)
533, 000. 00
234, 000. 00
Equivalent Units
410, 000. 00
390, 000. 00
Cost/Equivalent Unit (\$\$)
1. 30
0. 60
Cost Assignment
Completed and Transferred Out (\$\$)
722000
494000
228000
Ending WIP (\$\$)
45000
39000
6000
Total Costs to Account For (\$\$)
767, 000. 00
533, 000. 00
234, 000. 00
References
Ross, S. A. (2013). Fundamentals of Corporate Finance (10th ed.). New York, NY: McGraw-Hill Irwin.