Accounting

Let’s get started. We are going to make two batches of chicken pot pies. As a factory, we anticipated or estimated manufacturing overhead at $2,000,000. Our cost driver is determined to be direct labor. We have estimated direct labor hours of 100,000. Therefore, our predetermined overhead rate is:

$ ____________ / ______________ = $ _______________ per direct labor hour

Therefore, the standard cost per pot pie can be computed at:

 

Dir. mat.	$0.25
Dir. labor (.02 hours @ $10 per hour)	$0.20
MOH (.02 hours @ ____ per hour)	$ ____
Standard cost per pie	$ ____

 

You will need the following T accounts:

· Manufacturing Overhead

· Wages/Accounts Payable

· Work in Process

· Selling, General & Administrative Expense (SG&)

· Raw Material Inventory – Beginning Balance $40,000

· Supply Inventory – Beginning Balance $5,000

· Accumulated Depreciation

· Finished Goods

· Cost of Goods Sold

· Accounts Receivable

· Sales Revenue