Given: Tiana Shar, the controller for Bondi Furniture Company, is in the process

Question

Given: Tiana Shar, the controller for Bondi Furniture Company, is in the process of analyzing the overhead costs for the month of November. She has gathered the following data for the month.


Labor
Direct-labor hours:
Job 77 3,500
Job 78 3,000
Job 79 2,000
Labor costs:
Direct-labor wages $212,500
Indirect-labor wages 15,000
Supervisory salaries 6,500
Material
Inventories, November 1:
Raw material and supplies $10,500
Work in process (job 77) 53,000
Finished goods 113,000
Purchases of raw material and supplies:
Raw material $134,000
Supplies (indirect material) 17,000
Direct material and supplies requisitioned for production:
Job 77 $44,000
Job 78 37,500
Job 79 25,500
Supplies (indirect material) 13,000

Total $120,000

Other
Building occupancy costs (heat, light, depreciation, etc.)
Factory facilities $6,600
Sales offices 1,600
Administrative offices 1,000

Total $9,200

Production equipment costs:
Power $4,100
Repairs and maintenance 1,500
Depreciation 1,500
Other 1,000

Total $8,100


The firm’s job-order costing system uses direct-labor hours (measured at practical capacity) as the cost driver for overhead application. In December of the preceding year, Shar had prepared the following budget for direct-labor and manufacturing-overhead costs for the current year. The plant is theoretically capable of operating at 150,000 direct-labor hours per year. However, Shar estimates that the practical capacity is 120,000 hours in a typical year.

Manufacturing
Overhead
Direct-Labor Hours Variable Fixed
100,000 $325,000 $216,000
120,000 392,400 216,000
140,000 455,000 216,000

During November the following jobs were completed:


Job 77 Side chairs
Job 78 End tables


How do i find:
Compute the actual manufacturing overhead incurred during November??

Explanation / Answer

Adding up everything that went into manufacturing overhead during November: 15,000 Indirect Labor 6,500 Supervisor Salaries 13,000 Indirect Materials requisitioned 6,600 Building Occupancy cost - Factory Facilities 8,100 Production Equipment Costs 49,200 total - manufacturing overhead incurrred in November

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