Question

Work-in-Process Inventory for Carston Inc. at the beginning of the year was a single job, Job T114:

Work-in-Process Inventory for Carston Inc. at the beginning of the year was a single job, Job T114: Direct Direct Job # Materials Labor Overhead Total $ 16,250 $ 76,500 $ 31,500 T114 $28,750 The company's budgeted costs for the year are as follows: Budgeted overhead Variable $ 68,000 Indirect materials Indirect labor 56,000 28,000 Employee benefits Fixed Supervision Depreciation 13,000 15,000 $180,000 Total $ 90,000 Budgeted direct labor dollars Rate per direct 1abor dollar 200.00% The company's actual costs incurred during the year are as follows: Incurred by Jobs Materials 2,000 24,000 8,000 1,000 Job # Labor Other Total $ 12,000 $10,000 T114 18,000 34,000 42,000 42,000 17,000 T119 T133 T136 16,000 $35,000 $ 78,000 $113,000 Incurred by Jobs Labor Overhead Materials Other Total Indirect materials and supplies 60,000 60,000 50,000 33,000 15,000 Indirect labor 50,000 Employee benefits Depreciation Supervision 33,000 15,000 12,000 12,000 $ 60,000 $ 62,000 $ 48,000 $170,000 Total Required: 1. What was the actual factory overhead for Carston Inc. for the year? 2. What was overapplied or underapplied overhead for the year? 3. Job T114 was the only job completed and sold in the year. What amount was included in the Cost of Goods Sold account for this job? 4. What was the amount of Work-in-Process Inventory at the end of the year? 1. Total actual overhead 2 3. Cost of goods sold for job T114 4. Work-in-process inventory

Answer 1

1. Total Actual Overhead = $170,000

2.Overhead Applied = $180,000

Over applied Overhead = $180,000 - $170,000 = $10,000

3)Cost of Goods Sold for Job T114 = 76,750 + 2,000 + 10,000 + 20,000

=108,750

4) Work In Process = 237,000

	T119	T133	T136	Total
Material	$ 24,000.00	$      8,000.00	$    1,000.00	$    33,000.00
Direct Labor	$ 18,000.00	$    34,000.00	$ 16,000.00	$    68,000.00
Overhead	$ 36,000.00	$    68,000.00	$ 32,000.00	$ 136,000.00
Total	$ 78,000.00	$ 110,000.00	$ 49,000.00	$ 237,000.00