Question

Concord Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 23,400, direct labor $ 14,040, and manufacturing overhead $ 18,720. As of January 1, Job 49 had been completed at a cost of $ 105,300 and was part of finished goods inventory. There was a $ 17,550 balance in the Raw Materials Inventory account. During the month of January, Concord Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold during the month. The following additional events occurred during the month. 1. Purchased additional raw materials of $ 105,300 on account. 2. Incurred factory labor costs of $ 81,900. 3. Incurred manufacturing overhead costs as follows: indirect materials $ 19,890; indirect labor $23,400; depreciation expense on equipment $ 14,040; and various other manufacturing overhead costs on account $ 18,720. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor $ 11,700 $ 5,850 45,630 29,250 35,100 23,400

Answer 1

Part A

Predetermined overhead rate = Estimated total manufacturing overhead cost / direct labor cost = 982800/819000 = 120%

Part B

Job no.: 50
Date	Direct materials	Direct labor	Manufacturing overhead
Beg.	23400	14040	18720
Jan.	11700	5850	7020
	$35100	$19890	$25740
Cost of completed job
Direct materials			35100
Direct labor			19890
Manufacturing overhead			25740
Total cost			$80730

5850*120% = 7140

Job no.: 51
Date	Direct materials	Direct labor	Manufacturing overhead
Jan.	45630	29250	35100
	$45630	$29250	$35100
Cost of completed job
Direct materials			45630
Direct labor			29250
Manufacturing overhead			35100
Total cost			$109980

29250*120% = 35100

Job no.: 52
Date	Direct materials	Direct labor	Manufacturing overhead
Jan.	35100	23400	28080

23400*120% = 28080