PROBLEM 1. The Huyden Company builds equipment to customer\'s specifications. On

Question

PROBLEM 1. The Huyden Company builds equipment to customer's specifications. On March 1, two jobs were in process with the following costs and information: Job 43 Job 44 Direct materials $10,200 $34,400 Direct labor 21,000 10,400 Applied overhead* 4,950 7,370 Total cost $36,150 $52,170 Machine hours 45 67 *Applied on the basis of machine hours During March, Job 45 was started and Job 44 was completed and delivered to the customer. Job 43 was missing a part that was backordered and would be completed in June. The following costs were incurred in March: Job 43 Job 44 Job 45 Direct materials $2,300 $4,500 $12,700 Direct labor $2,400 $3,300 $4,500 Machine hours 21 11 23 It is Huyden's policy to bill clients at cost plus 40 percent. Required: a. Calculate the overhead rate that Huyden is using. b. Calculate the overhead applied to each job during the month of March. c. Calculate the balance in work in process on March 31. d. What was the price of Job 44?

Explanation / Answer

43 44 Material 10200 34400 Labour 21000 10400 OH 4950 7370 36150 52170 Mhours 45 67 a) OH rate 4950/45 or 7370/67 = 11=/- per machine hour 43 44 45 Material 2300 4500 12700 Labour 2400 3300 4500 b)OH @ 110/- 2310 1210 2530 Total 7010 9010 19730 Add: 40% 2804 3604 7892 Total 9814 12614 27622 C) Since Job 43 & 45 are in progress on march 31, so WIP are the total cost of job 43 & 45 without including profit element. Job 43 (36150+7010) = 43160 Job 45 19730 d) Price of Job 44 = 12614 Please rate the answer as lifesaver for the untiring efforts. Thank u in advance :) God Bless :)

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