Question

The following information applies to the O'Donnell Company for March production. There are only two jobs (X and Y) in production in March. a. Purchased direct materials and indirect materials with the following summary of receiving reports Material A Material B Indirect materials Total $24,500 16,250 7,250 $48,000 b. Issued direct materials and indirect materials with this summary of requisitions: Job X ş 9,700 4,700 Material A Material B Subtotal Indirect materials Total 19,400 9,700 $29,100 s29,100 14,400 43,500 43,250 86,750 $14,400

Answer 1

Solution 1:

Computation of Manufacturing Cost for Jobs - O'Donnell Company
Particulars	Job X	Job Y
Material A	$9,700.00	$19,400.00
Material B	$4,700.00	$9,700.00
Direct labor	$25,400.00	$16,700.00
Overhead applied	$59,950.00	$43,600.00
Total Manufacturing Cost	$99,750.00	$89,400.00

Solution 2:

Computation of Underapplied / (Overapplied) Overhead
Particulars	Amount
Actual overhead incurred:
Indirect material	$43,250.00
Indirect labor	$32,250.00
Utilities	$4,700.00
Depreciation	$21,400.00
Insurance	$4,200.00
Total actual overhead	$105,800.00
Overhead applied ($59,950 + $43,600)	$103,550.00
Underapplied overhead	$2,250.00

Cost of goods sold will increase on adjustment of underapplied overhead.