What is the total cost of Job A What is the total factory ov

What is the total cost of Job A?

What is the total factory overhead applied during September?

What is the overapplied or underapplied overhead for September?

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 96,000 and estimated factory overhead is $672,000. 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 Work-in-process inventory (All Job A) Finished goods inventory $ 8,700 33,600 73,000 122,000 Material purchases Direct materials requisitioned Job A Job B 77,000 39,500 Direct labor hours Job A Job B 5,400 3,000 Labor costs incurred Direct labor ($9.00/hour) Indirect labor Supervisory salaries 75,600 14,700 7,200 Rental costs Factory Administrative offices 8,200 3,000 Total equipment depreciation costs Factory Administrative offices 9,300 3,400 13,200 Indirect materials used

Solution

1. Total cost of JOB A

   Direct Material Cost - 77000

   Direct Labour Cost (5400*9) - 48600

   Factory Overhead cost 5400*7 - 37800

   Factory Cost 77000+48600+37800 = 163400

   Other Overheads (Equally divided between A & B) = 41500 / 2 i.e. 20750

   Total Cost = 163400 + 20750 = 184150 $

2. Total factory OH applied during Sept

    Overhead recovery rate = 672000 $ / 96000 Hours

                                     = 7 / Hours

    Total Hours worked = 5400+ 3000

                                 = 8400 Hours

     Factory overhead applied = 8400*7 = 58800 $

3. Factory Overhead for Sept = 672000 / 12

                                          = 56000 $

   Therefore Overhead Overapplied = 58800-56000

                                                 = 2800 $