What is the total cost of Job A? What is the total factory overhead applied duri
ID: 2611112 • Letter: W
Question
What is the total cost of Job A?
What is the total factory overhead applied during September?
What is the overapplied or underapplied overhead for September?
Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 96,000 and estimated factory overhead is $672,000. 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 Work-in-process inventory (All Job A) Finished goods inventory $ 8,700 33,600 73,000 122,000 Material purchases Direct materials requisitioned Job A Job B 77,000 39,500 Direct labor hours Job A Job B 5,400 3,000 Labor costs incurred Direct labor ($9.00/hour) Indirect labor Supervisory salaries 75,600 14,700 7,200 Rental costs Factory Administrative offices 8,200 3,000 Total equipment depreciation costs Factory Administrative offices 9,300 3,400 13,200 Indirect materials usedExplanation / Answer
1. Total cost of JOB A
Direct Material Cost - 77000
Direct Labour Cost (5400*9) - 48600
Factory Overhead cost 5400*7 - 37800
Factory Cost 77000+48600+37800 = 163400
Other Overheads (Equally divided between A & B) = 41500 / 2 i.e. 20750
Total Cost = 163400 + 20750 = 184150 $
2. Total factory OH applied during Sept
Overhead recovery rate = 672000 $ / 96000 Hours
= 7 / Hours
Total Hours worked = 5400+ 3000
= 8400 Hours
Factory overhead applied = 8400*7 = 58800 $
3. Factory Overhead for Sept = 672000 / 12
= 56000 $
Therefore Overhead Overapplied = 58800-56000
= 2800 $
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