Pineapple Corporation manufactures custom-made bags. The following data pertains to Job PA8: Direct materials placed into production $5,500 Direct labor hours worked hours 80 Direct labor rate per hour $40 Machine depreciation, supervisor salary $4,900 Machine hours worked 200 hours Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $125,000 for the year, and the direct labor hours were estimated to be 2,000. Assuming that Job PA8 has been sold to the customers for $22.000 (including sales tax 10%), how much is the gross profit from Jab PA8 after the company adjust the overapplied/underannliedioverhear?
Pineapple Corporation manufactures custom-made bags. The following data pertains to Job PA8: Direct materials placed into production $5,500 Direct labor hours worked hours 80 Direct labor rate per hour $40 Machine depreciation, supervisor salary $4,900 Machine hours worked 200 hours Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $125,000 for the year, and the direct labor hours were estimated to be 2,000. Assuming that Job PA8 has been sold to the customers for $22.000 (including sales tax 10%), how much is the gross profit from Jab PA8 after the company adjust the overapplied/underannliedioverhear?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please show the computation
Transcribed Image Text:Pineapple Corporation manufactures custom-made bags. The following data pertains
to Job PA8:
we
Direct materials placed into production
$5,500
Direct labor hours worked
80
hours
Direct labor rate per hour
$40
Machine deprediation, supervisor salary
$4,900
Machine hours worked
200 hours
Factory overhead is applied using a plant-wide rate based on direct labor hours.
Factory overhead was budgeted at $125,000 for the year, and the direct labor hours
were estimated to be 2,000.
Assuming that Job PA8 has been sold to the customers for $22.000 (including sales
tax 10%), how much is the gross profit from Jab PA8 after the company adjust the
overapplied/underapplied.overhead?
Expert Solution
Step 1
Solution
Predetermined overhead rate = Estimated overhead / Estimated direct labor hours
= $125,000 / 2000 = $62.50 per direct labor hour
Total cost of Job PA 8 = Direct materials + Direct labor + Overhead applied
= $5,500 + (80*$40) + (80*$62.50)
= $5,500 +$3,200 + $5,000
= $13,700
Overapplied overhead = Overhead applied - Actual overhead = $5,000 - $4,900 = $100
Cost of job sold = $13,700 + $100 = $13,800
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