Job Costing
The following information applies to the Colbert Company for March production. There are only two jobs (A and B) in production in March.
a. Purchased direct materials and indirect materials with the following summary of receiving reports:
Material A | $16,000 |
Material B | 12,000 |
Indirect materials | 3,000 |
Total | $31,000 |
b. Issued direct materials and indirect materials with this summary of requisitions:
| Job X | Job Y | Total |
Material A | $6,000 | $15,000 | $21,000 |
Material B | 2,000 | 7,000 | 9,000 |
Subtotal | $8,000 | $22,000 | $30,000 |
Indirect materials |
|
| 42,000 |
Total |
|
| $72,000 |
c. Factory labor incurred is summarized by these time tickets:
Job X | $16,000 |
Job Y | 12,000 |
Indirect labor | 28,000 |
Total | $56,000 |
d. Factory utilities, factory depreciation, and factory insurance incurred is summarized by these factory vouchers, invoices, and cost memos:
e. Factory overhead costs were applied to jobs at the predetermined rate of $46 per machine-hour. Job X incurred 1,300 machine-hours; Job Y used 900 machine-hours.
Utilities | $ 3,000 |
Depreciation | 18,000 |
Insurance | 2,500 |
Total | $23,500 |
f. Job X was completed; Job Y was still in process at the end of March.
g. Job X was shipped to customers during March. Job X had a gross margin of 20 percent based on manufacturing cost.
The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March.
Required
1. Calculate the amount of overapplied or underapplied overhead and state whether the cost of goods sold account will be increased or decreased by the adjustment.
2. Calculate the total manufacturing cost for Job X and Job Y for March.
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