4-33 Job Costing Johnson Inc. is a job-order manufacturing company that uses a p

Question

4-33 Job Costing Johnson Inc. is a job-order manufacturing company that uses a predetermined over-head rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 95,000 and estimated factory overhead is $617,500. The following information is for September of the current year. Job A was completed during September, and Job B was started but not finished.

September 1, inventories

Materials inventory$ 7,500

Work-in-process inventory (All Job A)31,200

Finished goods inventory67,000

Material purchases104,000

Direct materials requisitioned Job A65,000

Job B33,500

Direct labor hours Job A4,200

Job B3,500

Labor costs incurred Direct labor ($8.50/hour)65,450

Indirect labor13,500

Supervisory salaries6,000

Rental costs Factory7,000

Administrative ofces1,800

Total equipment depreciation costs Factory7,500

Administrative ofces1,600

Indirect materials used12,000

Required 1. What is the total cost of Job A?

2. What is the total factory overhead applied during September?

3. What is the overapplied or underapplied overhead for September?

Explanation / Answer

1) total cost= direct material+direct labour+applied overhead+ begining WIP

applied overhead rate=617500/95000=6.5
Beginning WIP= 31200
total cost:65000+(4200*8.5)+(4200*6.5)+31200=$159,200

2)overhead= (4200+3500)*6.5=$50,050

3)
=(13500+6000+7000+7500+!2000)-50050=$4050 over applied

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