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x.Hmanc Company employs a job order cost system to account for its costs. The co

ID: 2433759 • Letter: X

Question

x.Hmanc Company employs a job order cost system to account for its costs. The company has three production departments Separate departmental cost driver rates are employed because the demand for support activities for the three departments is very different. All jobs generally pass through all theree production departments. Data regarding was done during June appear below. Jobs 101 and 102 were completed during June, while job 103 was not completed as of June 30. The costs charged to Jobs not completed at the end of a month are shown as work in process inventory at the end of that month and at the beginning of the next month:

Production Departments                          Direct Labor Rate              Cost Driver Rates
Department 1                                              12                                   150% of the direct material cost
Department 2                                               18                                   $8 per machine hour
Department 3                                                15                                   200% of direct labor cost      

                                                             Job 101              Job 102             Job 103
Beginning work in process                      25,500               32,400                 0
Direct materials:
Department 1                                          40,000              26,000                  58,000
Department 2                                           3,000               5,000                    14,000
Department 3                                            0                      0                                0
Direct Labor Hours:
Department 1                                             500                 400                            300
Department 2                                              200                 250                            350
Department 3                                              1,500              1,800                        2,500
Machine Hours:
Department 1                                              0                      0                               0
Department 2                                              1,200              1,500                        2,700
Department 3                               

Explanation / Answer

Job 101

Job 102

Job 103

$25,500

$32,400

0

Department 1

Driver 1

$40,000

$26,000

$58,000

500 x $12

$6,000

400 x $12

$4,800

300 x $12

$3,600

$40000 x 150%

$60,000

$26000x150%

$39,000

$58,000 x 150%

$87,000

$3,000

$5,000

$14,000

200 x $18

$3,600

250 x $18

$4,500

350 x $18

$6,300

1200 x 8

$9,600

1500 x 8

$12,000

2700 x 8

$21,600

0

0

0

1500 x $15

$22,500

1800 x $15

$27,000

2500 x $15

$37,500

$22,500 x 200%

$45,000

$27,000 x 200%

$54,000

$37,500 x 200%

$75,000

$215,200

$204,700

$303,000

Job 101

Job 102

Job 103

Begining WIP

$25,500

$32,400

0

Department 1

Driver 1

Direct Materials

$40,000

$26,000

$58,000

Direct labor

500 x $12

$6,000

400 x $12

$4,800

300 x $12

$3,600

Support cost

$40000 x 150%

$60,000

$26000x150%

$39,000

$58,000 x 150%

$87,000

Department 2 Direct Materials

$3,000

$5,000

$14,000

Direct labor

200 x $18

$3,600

250 x $18

$4,500

350 x $18

$6,300

Support cost

1200 x 8

$9,600

1500 x 8

$12,000

2700 x 8

$21,600

Department 3 Direct Materials

0

0

0

Direct labor

1500 x $15

$22,500

1800 x $15

$27,000

2500 x $15

$37,500

Support cost

$22,500 x 200%

$45,000

$27,000 x 200%

$54,000

$37,500 x 200%

$75,000

Total Cost

$215,200

$204,700

$303,000