The following information is for Punta Company for July: a. Applied factory overhead costs to jobs at

Question:

The following information is for Punta Company for July:

a. Applied factory overhead costs to jobs at the predetermined rate of $42.50 per labor hour. Job S incurred 6,175 labor hours; Job T used 4,275 labor hours.

b. Shipped Job S to customers during July. Job S had a gross margin of 24% based on manufacturing cost.

c. Job T was still in process at the end of July.

d. Closed the over-applied or under-applied overhead to the Cost of Goods Sold account at the end of July.

e. Factory utilities, factory depreciation, and factory insurance incurred are summarized as follows:

Utilities...........................$14,250

Depreciation.......................45,000

Insurance...........................18,000

Total..............................$77,250

f. Direct materials and indirect materials used are as follows:

______________________Job S_______JobT _______Total

Material A...................$28,500......$ 71,250.......$ 99,750

Material B.....................12,000.........35,000.........47,000

Subtotal.....................$40,500......$106,250......$146,750

Indirect materials.............................................211,000

Total..........................................................$357,750

g. Factory labor incurred for the two jobs and indirect labor are as follows:

Job S...................$ 55,500

Job T.....................45,000

Indirect labor..........133,000

Total..................$233,500

Required

1. Calculate the total manufacturing cost for Job S and Job T for July.

2. Calculate the amount of over-applied or under-applied overhead and state whether the Cost of Goods Sold account will be increased or decreased by the adjustment.

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Related Book For  book-img-for-question

Cost Management A Strategic Emphasis

ISBN: 978-0077733773

7th edition

Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins

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