Overhead application rate=Overhead applied/Direct labor | |||||||
For this purpose,consider any job | |||||||
Let's take Job A1 | |||||||
Overhead application rate=7650/12750=$ 0.6 per direct labor cost | |||||||
a) | B2 | ||||||
Beginning cost in work in process | 22089 | ||||||
Add: Current period costs | |||||||
Direct materials | 615 | ||||||
Direct labor | 5250 | ||||||
Overhead applied | (5250*0.6) | 3150 | |||||
Total cost | 31104 | ||||||
b) | Apr 30 balances of Direct materials: | ||||||
$ | $ | ||||||
Beginning balance | 11700 | ||||||
Add:Materials purchased | 12750 | ||||||
24450 | |||||||
Less:Materials issued | |||||||
E5 | 6270 | ||||||
F6 | 5400 | ||||||
G7 | 1800 | ||||||
A1 | 1425 | ||||||
B2 | 615 | ||||||
C3 | 1800 | 17310 | |||||
Ending balance | 7140 | ||||||
Apr 30 balances of work-in-process=Cost of Jobs in process=Cost of F6 and G7 | |||||||
F6 | G7 | Total | |||||
Direct materials | 5400 | 1800 | |||||
Direct labor | a | 12510 | 4365 | ||||
Overhead applied | a*0.6 | 7506 | 2619 | ||||
Total cost | 25416 | 8784 | 34200 | ||||
Apr 30 balances of finished goods=Cost of Jobs in finished goods=Cost of C3 | |||||||
C3 | |||||||
Beginning cost in work in process | 19800 | ||||||
Add: Current period costs | |||||||
Direct materials | 1800 | ||||||
Direct labor | a | 6750 | |||||
Overhead applied | a*0.6 | 4050 | |||||
Total cost | 32400 | ||||||
c) | Cost of goods manufactured | ||||||
$ | $ | ||||||
Beginning materials inventory | 11700 | ||||||
Plus: Raw material purchases | 12750 | ||||||
Total direct materials available | 24450 | ||||||
Less: Ending raw materials inventory (Dec 31) | 7140 | ||||||
Direct materials used | 17310 | ||||||
Direct labor: | |||||||
A1 | 3000 | ||||||
B2 | 5250 | ||||||
C3 | 6750 | ||||||
E5 | 13800 | ||||||
F6 | 12510 | ||||||
G7 | 4365 | 45675 | |||||
Overhead applied | (45675*0.6) | 27405 | |||||
Total current manufacturing cost | 90390 | ||||||
Plus: Beginning work in process inventory | 68589 | ||||||
Total manufacturing cost | 158979 | ||||||
Less: Ending work in process inventory | 34200 | ||||||
Cost of goods manufactured | 124779 | ||||||
d) | Actual overhead: | ||||||
$ | |||||||
Supervisory salaries | 6000 | ||||||
Factory rent | 3000 | ||||||
Machine depreciation | 4500 | ||||||
Indirect labor | 7500 | ||||||
Factory supplies | 1650 | ||||||
Factory employee benefits | 3840 | ||||||
Total | 26490 | ||||||
Note:Selling expenses are not part of factory overhead. | |||||||
Applied overhead=$ 27405 | |||||||
Applied overhead > Actual overhead. | |||||||
Hence,overhead is over-applied | |||||||
Over-applied overhead=27405-26490=$ 915 |
ICP 3 Avengers United assigns costs to its products using a job order costing system. The company assembles and pa...
ICP 2- Avengers United Avengers United assigns costs to its products using a job order costing system. The company assembles and packages 30 different products based on individual customer orders. Each order has a distinct job number On April 1, the company had the following amounts in inventory Direct materials Work-in-process Finished goods $ 11,700 S 68,589 $35,280 Included in the work-in-process account are the following jobs A1 B2 C3 Direct materials Direct labour Overhead applied Total $ 6,300 4,785...
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...
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:
Questions 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...
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 150,000 180,000 210,000 Variable overhead costs $ 1,200,000 $ 1,440,000 $ 1,680,000 Fixed overhead costs 702,000 702,000 702,000 Total overhead $ 1,902,000 $ 2,142,000 $ 2,382,000 The expected volume is 180,000 direct...
Scenario: Atchison 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 150,000 180,000 210,000 Variable overhead costs $1,155,000.00 $1,386,000.00 $1,617,000.00 Fixed overhead costs 712,800 712,800 712,800 Total overhead $1,867,800.00 $2,098,800.00 $2,329,800.00 The expected volume is 180,000 direct labor-hours for...
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...
Kenworth Company uses a job-order costing system. Only three
jobs—Job 105, Job 106, and Job 107—were worked on during November
and December. Job 105 was completed on December 10; the other two
jobs were still in production on December 31, the end of the
company’s operating year. Data from the job cost sheets of the
three jobs follow:
Job Cost Sheet
Job 105
Job 106
Job 107
November costs incurred:
Direct materials
$
20,500
$
13,300
$
0...
Haughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on direct labor costs to apply factory overhead to all jobs. During the month of July, the firm processed three jobs: X13, X14, and X15, of which X13 was started in June. July 1 Inventories Direct Materials Work-in-Process Finished Goods $ 36,500 41,000 Cost of Goods Sold Direct materials purchased in July 55,000 Materials issued to production: X13 x14 x15 16,380 24,220...
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