I need all steps about this question. Thanks Weinrich Manufacturing uses a job o
ID: 2477965 • Letter: I
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I need all steps about this question. Thanks
Weinrich Manufacturing uses a job order cost system and applies overhead to production on the basis ot direct labor hours. On January 1, 2011, Job No. 25 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $10.000:.direct labor S6.000; and manufacturing.overhead $9.000. Job No. 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $8,000 balance in the Raw Materials Inventory account. During the month of January, the company began production on Jobs 26 and 27. and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month. Purchased additional raw materials of $40,000 on account. Incurred direct factory labor costs of $24,000 and indirect factory labor of $7,500. Payroll will be paid next week. Incurred manufacturing overhead costs as follows: indirect materials $10,000 requisitioned from raw materials; factory depreciation expense $12,000; and various other manufacturing overhead costs on account $11,000. Assigned direct materials and direct labor to jobs as follows. The company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job during the month were as follows: Job No. 25 - 200 direct labor hours: Job No. 26 - 800 direct labor hours; and Job No. 27 - 600 direct labor hours Calculate the predetermined overhead rate for the year 2011, assuming Weinrich estimates total manufacturing overhead costs of $480,000, total direct labor costs of S300.000, and total direct labor hours of 20.000 for the year. Prepare all necessary journal entries based on above information. What is the balance in the Raw Materials Inventory, Work in Process Inventory, and Finished Goods Inventory at the end of the month? What is the amount of over or under-applied overhead?Explanation / Answer
Overhead is charged to production on the basis of direct labour hours.
a. Manufacturing overhead $480000
Direct Labour cost $300000
Total $ 780,000
Direct labour hours = 20000
Overhead cost per unit = 780000/20000 = $39 p u
b. No journal entries are required to be passed for calculating cost, except for actual sale. ie,
Cash A/c Dr. 137000
To sales (Job 23) 63000
To sales (Job 25) 74000
(Being sale of Job 23 and 25)
c. Closing Raw material inventory:
Opening 8000 + additional purchased 40000 - materials used for Job 25-27 35000 = 13000
WOrk in process inventory: Only Job 27 is remianing in the process and the cost if 13000
Finished goods : Job 26 is completed and kept in the finished goods stock worth $ 17000
d. Total cost charged is 39 per unit where as actutal incurred iis 32.25 [ 64500/20000]. so there is over application of overhead.
64500 is calculated as Factory Overhead= 24000+7500 + indirect material 10000+depreciation 12000+other expenses 11000.
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