Question

Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: Direct labor-hours Variable overhead costs Fixed overhead costs Total overhead 150,000 $1,050,000 648,000 $1,698,000 180,000 $1,260,000 648,000 $1,908,000 210,000 $1,470,000 648,000 $2,118,000 The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed. $ 31,500 $ 162,000 $ 337,500 Inventories, March 1 Materials and supplies Work-in-process (Job 6023) Finished goods Purchases of materials and supplies Materials Supplies Materials and supplies requisitioned for production Job 6023 Job 6024 Job 6025 Supplies $ 405,000 $ 45,000 $ 135,000 112,500 76,500 18,000 $ 342,000 Factory direct labor-hours (DLH) Job 6023 Job 6024 Job 6025 10,500 DLH 9,000 DLH 6,000 DLH

Answer 1

Answer -

$ a Predetermined Overhead rate Total overhead (a) Direct labor hours (b) Predetermined overhead rate (a/b) 1,908,000.00 180000 10.60 $ bTotal Cost of Job 6023 Work in process, March 1 Add: Materials requisitioned Add: Direct labor(10500*$8) Add: Overhead cost (10500*$9) $ $ $ $ 162,000.00 135,000.00 84,000.00 94,500.00 Total cost of Job 6023 $ 475,500.00 Factory Overhead cost of Job 6025 Direct labor hours of Job 6025 Predetermined Overhead rate Factory Overhead cost of Job 6025 $ $ 60001 9.00 54,000.00 d Total overhead applied to Jobs during March Total Direct labor hours Predetermined Overhead rate Total amount of overhead $ 255001 - 10500-9000-6000 9.00 229,500.00 $ e Actual factory overhead incurred Supplies requisitioned for production Indirect labor wages Supervisory salaries Factory facilities Factory Equipment costs $ $ $ $ $ 18,000.00 51,000.00 108,000.00 19,500.00 24,000.00 =12000+4500-7500 Actual factory overhead incurred $ 220,500.00 f New Account Balances Overapplied Overhead $ Cost of goods sold $ 2,937,000.00 =2940000-3000 Work in process inventory $ 114,000.00 Finished goods inventory $ 246,000.00 *As overapplied overhead is not material, so it is with cost of goods sold

.