Job-Order Costing U-Design-It Furniture Company uses a job-order cost system. The company applies manufacturing overhead to...
Job-Order Costing
U-Design-It Furniture Company uses a job-order cost system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor hours. The estimated MOH was $144,000 for the year and the estimated direct labor hours were 18,000 hours.
In March, Job #175 was completed. Direct materials totaled $7,000. Total labor costs were $6,000 at $20 per hour.
At the end of the year, it was determined that the company worked 17,000 direct labor hours for the year, and incurred $132,000 in actual factory overhead costs.
REQUIRED:
1. Calculate the predetermined overhead rate for the year (1 point):
2. Determine the amount of overhead charged to all the jobs for the company during the year (1 point):
3. Determine the total amount of under- or over-applied overhead for all the jobs in the year (1 point):
4. Prepare a job cost sheet for Job #175 using the information given above. Assuming that 30 units were completed, determine the unit product cost. (3 points)
Homework Answers
| 1) | Predetermined OH rate = | Total Estimated MOH / Total Estimated DLH | |||
| = | $ 144000 / 18000 | ||||
| = | $ 8.00 | per DLH | |||
| 2) | Total Labor cost incurred in Job 175 | $ 6,000.00 | ||||
| Direct Labor rate per hour | $ 20.00 | |||||
| Direct Labor Hours used | 300 | |||||
| Predetermined OH rate | $ 8.00 | per DLH | ||||
| OH applied to Job 175 | $ 2,400.00 | ($ 8 x 300 DLHs) | ||||
| 3) | Actual DLHs worked | 17000 | |||
| Predetermined OH rate | $ 8.00 | per DLH | |||
| OH applied | $ 136,000.00 | ||||
| Actual OH incurred | $ 132,000.00 | ||||
| Overapplied OH | $ 4,000.00 | ||||
| 4) | Job Cost Sheet | ||
| Direct Materials | $ 7,000.00 | ||
| Direct Labor | $ 6,000.00 | ||
| OH applied | $ 2,400.00 | ||
| Total Manu. Cost | $ 15,400.00 | ||
| No. of units | 30 | ||
| Unit product cost | $ 513.33 | ||
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