Johnson Incorporated 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 81,000 and estimated factory overhead is $486,000. 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 $ 9,200 Work-in-process inventory (All Job A) 34,600 Finished goods inventory 75,500 Material purchases 129,500 Direct materials requisitioned Job A 82,000 Job B 42,000 Direct labor hours Job A 5,900 Job B 2,400 Labor costs incurred Direct labor ($8.00/hour) 66,400 Indirect labor 15,200 Supervisory salaries 7,700 Rental costs Factory 8,700 Administrative offices 3,500 Total equipment depreciation costs Factory 10,050 Administrative offices 4,150 Indirect materials used 13,700 Required: 1. What is the total cost of Job A? 2. What is the total factory overhead applied during September? 3. What is the overapplied or underapplied overhead for September?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Johnson Incorporated 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 81,000 and estimated factory overhead is $486,000. 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 $ 9,200 Work-in-process inventory (All Job A) 34,600 Finished goods inventory 75,500 Material purchases 129,500 Direct materials requisitioned Job A 82,000 Job B 42,000 Direct labor hours Job A 5,900 Job B 2,400 Labor costs incurred Direct labor ($8.00/hour) 66,400 Indirect labor 15,200 Supervisory salaries 7,700 Rental costs Factory 8,700 Administrative offices 3,500 Total equipment depreciation costsFactory 10,050 Administrative offices 4,150 Indirect materials used 13,700 Required:
1. What is the total cost of Job A?
2. What is the total factory overhead applied during September?
3. What is the overapplied or underapplied overhead for September?
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