Question

Amount of Activity Cost Driver Driver Setting up $168,000 Setups design 1,200 Purchasing 186,000 Number of parts 15,000 Other Direct labor overhead 50,000 415,000 hours Salazar worked on five jobs in March. Data are as follows: Job 15 Job 16 Job 17 Job 18 Job 19 Balance, $34,500 $39,890 $ $24,090 $0 March 1 $0 Direct $28,000 $37,900 $25,350 $11,000 materials $13,580 Direct labor $10,000 $8,500 $23,000 $12,700 $8,000 Setups 20 14 35 8 15 Number of 150 180 200 500 300 parts Direct labor 650 580 1,600 870 520 hours By March 31, Jobs 15, 16, and 17 were completed and sold. The remaining jobs were in process. Required: 1. Calculate the activity rates for each of the three overhead activities. If required, round your answers to the nearest cent. Setup rate per set up Purchasing rate per part Other overhead per direct labor rate hour 2. Prepare job-order cost sheets for each job showing all costs through March 31. What is the cost of each job by the end of March?. If an amount is zero, enter "O". Salazar Company Job-Order Cost Sheets Job 15 Job 16 Job 17 Job 18 Job 19 Balance, March 1 $ $ $ $ Direct materials Direct labor Applied overhead: Setups Purchasing Other overhead Total cost 3. Calculate the balance in Work in Process on March 31. 4. Calculate the cost of goods sold for March.

Answer 1

Computation of Activity Rates Activity Cost Amount of Driver Activity Rate Setup Rate $ 1,68,000 $ 140.00 per setup Purchasing Rate $ 1,86,000 1200 setups number of 15000 parts Direct labor 50000 hours $ 12.40 per part per direct 8.30 labor Other OH Rate $ 4,15,000 $ $ Solution 2 Salazar Company Job-Order Cost Sheets Job 15 Job 16 Job 17 Job 18 Job 19 34,500 $ 39,890 $ 24,090 28,000 $ 37,900 $ 25,350 $ 11,000 $ 13,580 10,000 $ 8,500 $ 23,000 $ 12,700 $ 8,000 $ $ $ Balance, March 1 Direct Materials Direct Labor Applied Overhead : Setups Purchasing Other overhead Total Cost $ $ $ $ 2,800 $ 1,960 $ 1,860 $ 2,232 $ 5,395 $ 4,814 $ 82,555 $ 95,296 $ 4,900 $ 1,120 $ 2,100 2,480 $ 6,200 $ 3,720 13,280$ 7,221 $ 4,316 93,100 $ 38,241 $ 31,716 Solution 3 Balance In Work in Progress ($ 38,241 + $ 31,716) $ 69,957 Solution 4 Cost of Goods sold for March ($ 82,555 + $ 95,296 + $ 93,100) $2,70,951

Working Note :

Solution 1 Computation of Activity Rates Activity Cost Amount of Driver Activity Rate Setup Rate 168000 1200 setups =168000/1200 per setup Purchasing Rate 186000 15000 number of parts =186000/15000 per part Other OH Rate 415000 50000 Direct labor hours =415000/5000 per direct labor Solution 2 Job 15 Salazar Company Job-Order Cost Sheets Job 16 39890 37900 Job 17 Job 18 Job 19 24090 34500 28000 10000 25350 11000 13580 8000 8500 23000 12700 Balance, March 1 Direct Materials Direct Labor Applied Overhead: Setups Purchasing Other overhead Total Cost =20*140 =150*12.4 =650*8.3 =SUM(D44:D50) =14*140 =180*12.4 =580*8.3 =SUM(E44:E50) =35*140 =200*12.4 =1600*8.3 =SUM(F44:F50) =8*140 =500*12.4 =870*8.3 =SUM(G44:650) =15* 140 1 =300*12.4 1=520*8.3 =SUM(H44:H50)

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