Question: I need help solving the problem below? Script Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on
| I need help solving the problem below?
| |||
| Script Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labor-hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows: | |||
| Direct labor-hours | 18,000 | 24,000 | 30,000 |
| Variable overhead costs | 864,000 | 1,152,000 | 1,440,000 |
| Fixed overhead costs | 1,200,000 | 1,200,000 | 1,200,000 |
| Total overhead | 2,064,000 | 2,352,000 | 2,640,000 |
| The expected volume is 24,000 direct labor-hours for the entire year. The following information is for October, when jobs 1011 and 1015 were completed: | |||
| Inventories, October 1 | |||
| Raw materials and supplies | 100800 | ||
| Work in process (Job 1011) | 219120 | ||
| Finished goods | 546960 | ||
| Purchases of raw materials and supplies | |||
| Raw materials | 1509600 | ||
| Supplies | 190320 | ||
| Materials and supplies requisitioned for production | |||
| Job 1011 | 674400 | ||
| Job 1015 | 562800 | ||
| Job 1017 | 113280 | ||
| Supplies | 184080 | ||
| 1534560 | |||
| Machine-hours (MH) | |||
| Job 1011 | 7,440 MH | ||
| Job 1015 | 7,320 MH | ||
| Job 1017 | 4,440 MH | ||
| Direct labor-hours (DLH) | |||
| Job 1011 | 8,400 DLH | ||
| Job 1015 | 3,660 DLH | ||
| Job 1017 | 2,220 DLH | ||
| Labor costs | |||
| Direct labor wages (all hours @ $48) | 685440 | ||
| Indirect labor wages (12,000 hours) | 151200 | ||
| Supervisory salaries | 307200 | ||
| Building occupancy costs (heat, light, depreciation, etc.) | |||
| Factory facilities | 88560 | ||
| Sales and administrative offices | 34080 | ||
| Factory equipment costs | |||
| Power | 52320 | ||
| Repairs and maintenance | 19680 | ||
| Other | 23760 | ||
| 95760 | |||
| (Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $100 per direct labor-hour. Use this amount in answering requirements [b] through [e].) | |||
| Required: | |||
| a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. | |||
| b. Compute the total cost of Job 1011 when it is finished. | |||
| c. How much of factory overhead cost was applied to Job 1017 during October? | |||
| d. What total amount of overhead was applied to jobs during October? | |||
| e. Compute actual factory overhead incurred during October. | |||
| f. At the end of the year, Script Company had the following account balances: | |||
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