Problem

Job Costing Johnson Inc. is a job-order manufacturing company that uses a predetermined ov...

Job Costing

 Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. For 2010, estimated direct labor-hours are 95,000, and estimated factory overhead is $617,500. The following information is for September 2010. Job A was completed during September, and Job B was started but not finished.

September 1, 2010, inventories

 

 Materials inventory

$ 7,500

 Work-in-process inventory (All Job A)

31,200

 Finished goods inventory

67,000

Material purchases

104,000

Direct materials requisitioned

 

 Job A

65,000

 Job B

33,500

Direct labor-hours

 

 Job A

4,200

 Job B

3,500

Labor costs incurred

 

 Direct labor ($8.50/hour)

65,450

 Indirect labor

13,500

 Supervisory salaries

6,000

Rental costs

 

 Factory

7,000

 Administrative offices

1,800

Total equipment depreciation costs

 

 Factory

7,500

 Administrative offices

1,600

Indirect materials used

12,000

Required

1. What is the total cost of Job A?

2. What is the total factory overhead applied during September?

3. What is the overapplied or underapplied overhead for September?

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Solutions For Problems in Chapter 4