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Naranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Beginning balance Materials requisitioned Direct labor cost Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in Dentory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: $23,800 $34,300 18,300 23,400 9,400 20,500 6,850 Job 42 $19,200 $1,300 12,200 13,600 1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 4,500

Naranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Beginning balance Materials requisitioned Direct labor cost Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in Dentory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: $23,800 $34,300 18,300 23,400 9,400 20,500 6,850 Job 42 $19,200 $1,300 12,200 13,600 1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 4,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Beginning balance Materials requisitioned Direct labor cost Job 39 Required: $23,800 Job 41 Job 42 $34,300 $19,200 $1,300 23,400 12,200 13,600 4,500 20,500 6,850 Job 40 18,300 9,400 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in entory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. 1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 2. Set up a simple job-order cost sheet for all jobs in process during June Naranjo Company
Transcribed Image Text:Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Beginning balance Materials requisitioned Direct labor cost Job 39 Required: $23,800 Job 41 Job 42 $34,300 $19,200 $1,300 23,400 12,200 13,600 4,500 20,500 6,850 Job 40 18,300 9,400 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in entory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. 1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 2. Set up a simple job-order cost sheet for all jobs in process during June Naranjo Company
1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 2. Set up a simple job-order cost sheet for all jobs in process during June. Naranjo Company Job Order Cost Sheets Balance, June 1 Job 39 Total Job 40 Job 41 Job 42 88 3. What if the expected direct labor rate at the beginning of the year was $24 instead of $30? What would the overhead rate be? If required, round your overhead rate answer to one decimal place. New budgeted direct labor cost-f New overhead rate - How would the cost of the jobs be affected? % of direct labor cost
Transcribed Image Text:1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 2. Set up a simple job-order cost sheet for all jobs in process during June. Naranjo Company Job Order Cost Sheets Balance, June 1 Job 39 Total Job 40 Job 41 Job 42 88 3. What if the expected direct labor rate at the beginning of the year was $24 instead of $30? What would the overhead rate be? If required, round your overhead rate answer to one decimal place. New budgeted direct labor cost-f New overhead rate - How would the cost of the jobs be affected? % of direct labor cost
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