Tiana Shar, the controller for Bondi Furniture Company, is in the process of analyzing the overhead costs br the month of November, She has gathered the following data for the month.

Labor

Direct-labor hours:

Job 77 ……………………………………………..               3,500

Job 78 …………………………………………….                3,000

Job 79 …………………………………………….                2,000

Labor costs:

Direct-labor wages ………………………...…..    $204,000

Indirect-labor wages ………………………..………   15,000

Supervisory salaries ………………………..……….     6,000

Material

Inventories, November 1:

Raw material and supplies ………………………..    $10,500

Work in process (job 77) …………………....………     54,000

Flushed goods ……………………………………......     112,500

Purchases of raw material and supplies:

Raw material …………………………………….......     $135,000

Supplies (indirect material) ……………………          15,000

Direct material and supplies requisitioned for production:

Job 77 ……………………………………………...........    $ 45,000

Jct78 ……………………………………………....                 37,500

Job 79 ……………………………………………...               25,500

Supplies (indirect material) ……………...               12,000

Total ……………………………………………..........…    $120,000

Other

Building occupancy costs meat, light, depreciation, etc.)

Factory facilities ………………………………....….    $ 6,400

Sales offices ……………………………………..              1,600

Administrative offices ………………………               1,000

Total ………………………………………………..........    $ 9,000

Production equipment costs:

Power …………………………………………….............. $ 4,100

Repairs and maintenance …………………………     1,500

Depreciation ………………………………………            1,500

Other ………………………………………………               1,000

Total ……………………………………………….            $ 8,100

The firm’s job-order costing system uses direct-labor hours (measured at practical capacity) as the cost driver for overhead application. In December of the preceding year. Shar had prepared the following budget for direct-labor and manufacturing-overhead costs for the current year, The plant is theoretically capable of operating at 150,000) direct-labor hours per year. However, Shar estimates that the practical capacity is 120,000 hours in a typical year.

During November, the following jobs were completed:

Job 77 …………………………………………….                Side chairs

Job 78 …………………………………………….                End tables

Required: 

Assist Shar by making the following calculations.

1. Calculate the 1, redelerinincd overhead rate for the current year.

2. Calculate the total cost of job 77.

3. Compute the amount of manufacturing overhead applied to job 79 during November.

4 What was the total amount of manufacturing overhead applied during November?

5, Compute the actual manufacturing overhead incurred during November.

6. Calculate the over applied or under applied overhead for November,

Transcribed Image Text:

Manufacturing Overhead Direct-Labor Hours Variable 100,000.. $325,000 390,000 455,000 Fixed $216,000 216,000 216,000 120,000 140,000..