How much were its total product costs last month? How much were its total period costs last month?Calculate applied MOH under actual and normal costing.
1. A greeting card company incurred the following costs associated with running its business last month: cardstock (thick paper), $9,800;ink, stickers, ribbons, and other card attachments, $7,500; rent on office space, $1,400; rent on factory space, $2,300; office salaries, $5,200; factory labor, $8,900; and advertising, $850. How much were its total product costs last month? How much were its total period costs last month?Calculate applied MOH under actual and normal costing.
2. Sunny Daze Growers accumulated actual MOH costs this year of $35,880, even though it had budgeted $42,500 of MOH. It allocates MOH based on the direct labor hours of its workers. At the beginning of the year, it budgeted for 8,500 hours but ended up using 9,200 hours this year.Determine (a) the budgeted MOH rate, (b) the actual MOH rate, (c) applied MOH under actual costing, and (d) applied MOH under normal costing.Calculate under- or overapplied MOH.
3. In managing the operations of Souper Foods, Rilee was trying to determine the total cost of producing its world-famous chicken noodle soup. She understood MOH costs were a large portion of the company's costs, as they were budgeted at $560,000 this year. At year-end, Souper Foods' applied MOH (under normal costing) totaled $490,000, despite incurring $530,000 in actual MOH cost this year. Had Souper Foods under- or overapplied its MOH cost this year? By how much?Determine ending balance in WIP Inventory.
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