Question

Oriole Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 22,600 direct labor $ 13,560, and manufacturing overhead $ 18,080. As of January 1, Job 49 had been completed at a cost of $ 101,700 and was part of finished goods inventory. There was a $ 16,950 balance in the Raw Materials Inventory account. During the month of January, Oriole Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold during the month. The following additional events occurred during the month. 1. 2. 3. Purchased additional raw materials of $ 101,700 on account. Incurred factory labor costs of $ 79,100. Incurred manufacturing overhead costs as follows: indirect materials $ 19,210; indirect labor $ 22,600; depreciation expense on equipment $ 13,560; and various other manufacturing overhead costs on account $ 18,080. Assigned direct materials and direct labor to jobs as follows. 4. Job No. Direct Materials 50 Direct Labor $ 5,650 28,250 22,600 $ 11,300 44,070 33,900 51 52

Answer 1

predetermined Overhead rate Estimated manufacturing Overhead X 100 Estimated Direct labor cost $949,200 X 100 $ 791,000 = 120-4 predetermined overhead rate 120/