Question

Question 8 Red Fire Inc. produces fire trucks. The company uses a normal job-order costing system to calculate its cost of goods manufactured. The company's policy is to price its job at cost plus 30% markup. On January 1, 2020, there was only one job in process, with the following costs: Job 200 $13,600 Direct materials Direct labour Applied overhead Total 18,000 27,000 $58,600 The following balances were taken from the company's general ledger as of January 1, 2020: Direct materials inventory Finished goods inventory (for Job 100) $45,400 85,000 During the year 2020, the following events occurred: Direct materials were purchased on account for $377,000 Two more jobs were started: Job 300 and Job 400. Direct materials and direct labour costs incurred by each job in process during the year 2020 were as follows: Job 200 Job 300 Job 400 Direct materials $150,900 $45,400 $35,100 Direct labour 132.100 45,400 25,700 The company incurred the following actual factory overhead during the year: Factory rent Factory supplies Indirect labour $135,000 55,400 85,290 Jobs 100 and 200 were sold. Jobs 200 and 300 were completed. Calculate the total applied overhead for the year 2020. The factory overhead costs are applied to each job on the basis of direct labour dollars. Total overhead applied $

Answer 1

			Job 200	Job 300	Job 400	Total
	Beginning WIP
	direct materials		13,600			13,600
	direct labor		18,000			18,000
	overhead applied		27,000			27,000
	total beginning wip		58,600			58,600
	cost added
	direct materials		150,900	45,400	35,100	231,400
	direct labor		132,100	45,400	25,700	203,200
	overhead applied		198150	68100	38550	304800
	total cost added		481,150	158,900	99,350	739,400
	total cost of job		539,750	158,900	99,350	798,000
1)	overhead rate =		150%	(27000/18000)
	total overhead applied =			304800	answer
2)	Job No.200
	cost of completed job
	Direct materials			164,500
	Direct labor			150,100
	Manufacturing overhead			225,150
	Total cost			539,750
	Job 300
	cost of completed job
	Direct materials			45,400
	Direct labor			45,400
	Manufacturing overhead			68100
	Total cost			158,900
	Job 400
	cost of completed job
	Direct materials			35,100
	Direct labor			25,700
	Manufacturing overhead			38550
	Total cost			99,350
3)	Manufacturing overhead applied:
	overhead incurred during the month				275690
	Manufacturing overhead applied:				304800
	overapplied	overhead			29110
4)	Statement of cost of goods sold
	Beginning finished goods				85,000
	Cost of goods manufactured				698,650
	cost of goods available for sale				783,650
	less finished goods ,Ending				158,900
	unadjusted cost of goods sold				624,750
	less overapplied overhead				29110
	adjusted cost of goods sold				595,640
5)	Selling price of job 200				701675
6)	Direct materials				191,000
	Work in process				99,350