company uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The predetermined overhead rate was computed from the following data: Total estimated factory overhead $2,400,000 Total estimated direct labour cost $2,000,000 The WIP account given below relates to the activities for the month of June: WIP Inventory A/C June 1 Balance b/f $15,000 Direct Materials Used 123,000 Additional data: ▪ Total material requisitioned ………………………………… $153,000 ▪ Manufacturing Labour Costs incurred …………………. $163,500 (75% represents direct labour) ▪ Other manufacturing overheads incurred …………... $94,275 ▪ Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a margin of 33 1/3% on sales. What is the Gross profit earned on the jobs, after adjusting for the manufacturing overhead variance.
The company uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The predetermined overhead rate was computed from the following data:
Total estimated factory overhead $2,400,000
Total estimated direct labour cost $2,000,000
The WIP account given below relates to the activities for the month of June:
WIP Inventory A/C
June 1 Balance b/f $15,000
Direct Materials Used 123,000
Additional data:
▪ Total material requisitioned ………………………………… $153,000
▪
▪ Other manufacturing
▪ Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a margin of 33 1/3% on sales.
What is the Gross profit earned on the jobs, after adjusting for the manufacturing overhead variance.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
