Uperation on July 1 with no beginning inventories. It started two jobs du and Job Q. Job P was completed and sold by the end of July. Job Q was completed but was not sold by The company uses a plant-wide predetermined overhead rate based on direct labor-hours (DLHS) and based on the actual DLHS. The following additional information is available for the company as a whc and Q (all data and questions relate to the month of July): Estimated total fixed manufacturing overhead (MOH) Estimated variable manufacturing overhead cost per DLH $ 1.40
Please I want to learn how to make this problem with a good explanation. One of those there is the possible answer.
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Solution :
Job P has been sold
Job Q has not been sold and remained in inventory
From the value of inventory which is of Job Q we can find the manufacturing overhead allocated to Job Q
|
Value of inventory |
$24380 |
|
Less direct material |
($9300) |
|
Less direct labor |
($11700) |
|
Manufacturing overhead allocated |
$3380 |
The allocation was done using actual hours
Actual hours for Job Q =650 hours
The plantwide rate = Manufacturing overhead allocated to Q / Actual hours for Job Q
=3380 / 650
=$5.2 per hour
The plantwide rate was calculated on estimated overhead using estimated labor hours
Total estimated labor hours =2700 +630
=3330 hours
Hence estimated total Fixed MOH = The plantwide rate * Total estimated labor hours
=$5.2 * 3330
=$17316
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