1 Johnson Inc is a joborder manufacturing company that uses

1. 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 the current year, estimated direct labor hours are 85,000 and estimated factory overhead is $595,000. The following information is for September of the current year. Job A was completed during September, and Job B was started but not finished.   

  September 1, inventories

  Materials inventory

$

7,600

   Work-in-process inventory (All Job A)

31,400

   Finished goods inventory

67,500

Material purchases

105,500

  Direct materials requisitioned

  Job A

66,000

   Job B

34,000

  Direct labor hours

   Job A

4,300

  Job B

3,600

  Labor costs incurred

   Direct labor ($9.00/hour)

71,100

   Indirect labor

13,600

   Supervisory salaries

6,100

  Rental costs

   Factory

7,100

   Administrative offices

1,900

  Total equipment depreciation costs

   Factory

7,650

   Administrative offices

1,750

  Indirect materials used

12,100

1. What is the total cost of Job A? (Do not round intermediate calculations.)

September 1, inventories
Materials inventory	$	7,600
Work-in-process inventory (All Job A)		31,400
Finished goods inventory		67,500
Material purchases		105,500
Direct materials requisitioned
Job A		66,000
Job B		34,000
Direct labor hours
Job A		4,300
Job B		3,600
Labor costs incurred
Direct labor ($9.00/hour)		71,100
Indirect labor		13,600
Supervisory salaries		6,100
Rental costs
Factory		7,100
Administrative offices		1,900
Total equipment depreciation costs
Factory		7,650
Administrative offices		1,750
Indirect materials used		12,100

Solution

Particulars Amount Direct materials        97,400 Direct labor        38,700 Overhead allocated        30,100 Total cost of job     1,66,200 Workings: Direct materials Opening wip        31,400 requested        66,000 Total material used        97,400 Direct labor Number of hours          4,300 Rate per hour                  9 Direct labor cost        38,700 Overhead applied a Cost base     5,95,000 b estimated labor hours        85,000 c= a/b Overhead rate per hour                  7 d number of hours allocated          4,300 e= c*d OH cost to job        30,100