Company uses job order costing system. The company has two producing departments (Processing and Assembly) and three
Question:
Company uses job order costing system. The company has two producing departments (Processing and Assembly) and three service departments (Maintenance, Personnel and Power).The company uses Direct Method to allocate overhead costs of service departments to producing departments. Budgeted overhead and other budgeted data for the year of 2020 were as follows
Maintenance Personnel Power Processing Assembly
Overhead 9.000 4.000 12.000 50.000 24.000
Maintenance hours - - 14 200 50
Number of employee 5 4 - 30 120
KWh 75 80 - 1.200 400
Machine hours - - - 13.400 1.200
Direct labor hours - - - 1.500 8.000
Overhead is applied on the basis of machine hours in Processing department and on the basis of direct labor hours in Assembly department. Beginning balances of inventories on January 1
Finished Goods 500.000 $
Job 100
During January, actual production and cost data are as follows
a. The company started a new job (Job 101) in January. Actual working hours for the job were as follows
ProcessingAssembly
(Machine hours)(Direct labor hours)
Job 101 7.4007.000
b. Costs
Job 101
Direct material cost 245.000 $
Direct labor cost 120.000 $
c. Actual overhead 62.000 $
d. Job 100 was sold at cost plus 0,20 mark up
e. Job 101 was completed and transferred to warehouse
- Calculate over (under) applied overhead
- Calculate cost of finished goods inventory on January 31
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello