Basic Job Costing Projest Reed Incorporated uses a joborder

Basic Job Costing Projest Reed Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000. The following information pertains to December of the current year: The following transactions took place during the month of December 1. Purchased raw materials for $25,000 on credit; 2. Requisitioned and used direct materials for the three jobs: a, $4,000 for Job 10 b. $4,800 for Job 11 c. $7,200 for Job 12 3. Used indirect materials worth $20,000 4. Incurred direct labor costs as follows: a. $ 2,400 for Job 10 b. S3,600 for Job 11 e. $4,000 for Job 12 5. Incurred $30,000 worth of indirect manufacturing 6. Depreciation on manufacturing plant and equipment 7. During the month of December, the company used labor costs. S21,000. the following direct labor hours and machine hours for the three jobs: Required

Solution

The picture quality is not good. Paticularly the value of the beginning work-in-process and the sale value of Job.10 have been taken as I can get from the picture available. You need to make the corrections if they are wrong.

1.

Working:

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Working:

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6.

The value of ending work in process is the cost incurred on Job.11 -- $55,400.

7.

Cost assigned to ending finished goods - Job.12 $56,200.

8.

Manufacturing overhead underapplied = $11,000

Predetermined overhead rate

30

per machine hour