Problem 1
Factory overhead for the Praeger Company has been estimated as follows:

    Nonvariable overhead $122,500     Variable overhead $90,000     Budgeted direct labor hours 42,500
Production for the month was 90 percent of the budget, and actual factory overhead totaled $175,000.

Calculate:
a. The predetermined factory overhead rate.
b. The under- or overapplied factory overhead.

Problem 2
The Tidle Manufacturing Company uses a job order cost system. Factory wages are paid on a straight hourly basis with indirect labor getting $8.50 an hour and direct labor getting $10.00 an hour.

During the week of January 7, the following hours were worked:

Direct Indirect Cutting Department 2,200 250 Splicing Department 2,400 200 Sanding Department 1,850 125 Joining Department 4,250 325
Salaries and wages are paid weekly, with administrative salaries totaling $16,500 and salesperson’s salaries totaling $12,200.

The following deductions are to be considered:

FICA tax 8.0% Federal income tax 12.0% State income tax 2.0% Federal unemployment tax 1.0% State unemployment tax 5.0%
Prepare journal entries to record:

a. The payroll.
b. The payment of the payroll.
c. The payroll distribution.
d. The employer’s payroll tax expense.

Problem 3
The Outdoor Manufacturing Company produces sporting equipment. The company maintains a single raw materials inventory account for both direct and indirect materials. The following information came from the factory ledger accounts for December:

Raw Materials, December 1 $ 45,500 Work in Process, December 1 125,000 Finished Goods, December 1 175,000 Raw materials purchases (during December) 623,000 Direct labor 435,000 Repairs and maintenance 37,200 Indirect materials 16,700 Utilities 63,200 Indirect labor 38,200 Supervisors’ salaries 18,300 Raw Materials, December 31 43,600 Work in Process, December 31 135,000 Finished Goods, December 31 150,000
Compute the cost…