Johnson Inc is a joborder manufacturing company that uses a

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 95,000 and estimated factory overhead is $617,500. 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 $ 8,600 Work-in-process inventory (All Job A) 33,400 72,500 120,500 Materials inventory Finished goods inventory Material purchases Direct materials requisitioned Job A Job B 76,000 39,000 Direct labor hours Job A Job B 5,300 3,100 Labor costs incurred Direct labor ($8.50/hour) Indirect labor Supervisory salaries 71,400 14,600 7,100 Rental costs Factory Administrative offices 8,100 2,900 Total equipment depreciation costs Factory Administrative offices 9,150 3,250 13,100 Indirect materials used Required: 1. What is the total cost of Job A? (Do not round intermediate calculations.) Total cost 2. What is the total factory overhead applied during September? (Do not round intermediate calculations. Total overhead cost 3. What is the overapplied or underapplied overhead for September? overhead

Solution

Calculation of Overhead rate Amount Estimated Factory Overheads 6,17,500.00 Estimated Direct Labour Hours      95,000.00 Overhead rate(617500/95000)                 6.50 Calculation of total cost of A Particulars Amount Direct Materials requisitioned      76,000.00 Direct Labour Cost(5300*8.5/hr)      45,050.00 Applied Overheads(5300*6.5/hr)      34,450.00 Opening Work in process      33,400.00 Total cost of A 1,88,900.00 Calculatio of total factory overhead applied during year Particulars Amount Total Direct Labour hours incurred(5300+3100)        8,400.00 Overhead Rate as calculated above                 6.50 Total Applied OH(8400*6.5)      54,600.00 Calculation of Overapplied or Underapplied Overhead Particulars Amount Actual Overhead      52,050.00 Indirect labour      14,600.00 Supervisory Salaries        7,100.00 Factory rental costs        8,100.00 Total equipment depreciation costs factory        9,150.00 indirect Materials used      13,100.00 Applied Overhead(above calc)      54,600.00 Over Applied OH(54600-52050)        2,550.00