JIT manufacturing company operates a job order costing system and applies overhead cost to job on the basis of machine hours. Its predetermined overhead rate was based on a cost formula that estimated $92,000 of manufacturing overhead for an estimated allocation base of 36,800 machine hours. The company has provided the following actual data for the year: Purchase of raw material $80,000 Direct labor cost $61,000 Actual manufacturing overhead costs, including indirect $74,000 material of $5,000 Machine hours 33,600 hours Beginning Ending Inventories: Raw materials $19,000 $15,000 Work in progress $38,000 $26,000 Finished goods $43,000 $28,000 Required: a) Compute the predetermined overhead rate for the year and compute the amount of underapplied or overapplied overhead for the year. b) Prepare a schedule of cost of goods manufactured for the year. c) Prepare the journal entry to adjust the underapplied or overhead and also a schedule of cost of goods sold for the year. d) For one of the jobs in January, it had used direct material of $4,000 and direct labor of $6,000. It has spent 300 machine hours. How much is the price of the job if the usual markup percentage on total costs is 30%?
JIT manufacturing company operates a job order costing system and applies overhead cost to job on the basis of machine hours. Its predetermined overhead rate was based on a cost formula that estimated $92,000 of manufacturing overhead for an estimated allocation base of 36,800 machine hours. The company has provided the following actual data for the year: Purchase of raw material $80,000 Direct labor cost $61,000 Actual manufacturing overhead costs, including indirect $74,000 material of $5,000 Machine hours 33,600 hours Beginning Ending Inventories: Raw materials $19,000 $15,000 Work in progress $38,000 $26,000 Finished goods $43,000 $28,000 Required: a) Compute the predetermined overhead rate for the year and compute the amount of underapplied or overapplied overhead for the year. b) Prepare a schedule of cost of goods manufactured for the year. c) Prepare the journal entry to adjust the underapplied or overhead and also a schedule of cost of goods sold for the year. d) For one of the jobs in January, it had used direct material of $4,000 and direct labor of $6,000. It has spent 300 machine hours. How much is the price of the job if the usual markup percentage on total costs is 30%?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:JIT manufacturing company operates a job order costing system and applies overhead
cost to job on the basis of machine hours. Its predetermined overhead rate was based
on a cost formula that estimated $92,000 of manufacturing overhead for an estimated
allocation base of 36,800 machine hours. The company has provided the following
actual data for the year:
Purchase of raw material
$80,000
Direct labor cost
$61,000
Actual manufacturing overhead costs, including indirect
$74,000
material of $5,000
Machine hours
33,600 hours
Beginning
Ending
Inventories:
Raw materials
$19,000
$15,000
Work in progress
$38,000
$26,000
Finished goods
$43,000
$28,000
Required:
a) Compute the predetermined overhead rate for the year and compute the amount of
underapplied or overapplied overhead for the year.
b) Prepare a schedule of cost of goods manufactured for the year.
c) Prepare the journal entry to adjust the underapplied or overhead and also a schedule
of cost of goods sold for the year.
d) For one of the jobs in January, it had used direct material of $4,000 and direct
labor of $6,000. It has spent 300 machine hours. How much is the price of the job
if the usual markup percentage on total costs is 30%?
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