JIT manufacturing company operates a job order costing system and applies overhead cost to job on the basis of machine hours. Its predetermined overhead rate was based on a cost formula that estimated $92,000 of manufacturing overhead for an estimated allocation base of 36,800 machine hours. The company has provided the following actual data for the year: Purchase of raw material $80,000 Direct labor cost $61,000 Actual manufacturing overhead costs, including indirect $74,000 material of $5,000 Machine hours 33,600 hours Beginning Ending Inventories: Raw materials $19,000 $15,000 Work in progress $38,000 $26,000 Finished goods $43,000 $28,000 Required: a) Compute the predetermined overhead rate for the year and compute the amount of underapplied or overapplied overhead for the year. b) Prepare a schedule of cost of goods manufactured for the year. c) Prepare the journal entry to adjust the underapplied or overhead and also a schedule of cost of goods sold for the year. d) For one of the jobs in January, it had used direct material of $4,000 and direct labor of $6,000. It has spent 300 machine hours. How much is the price of the job if the usual markup percentage on total costs is 30%?
JIT manufacturing company operates a job order costing system and applies overhead cost to job on the basis of machine hours. Its predetermined overhead rate was based on a cost formula that estimated $92,000 of manufacturing overhead for an estimated allocation base of 36,800 machine hours. The company has provided the following actual data for the year: Purchase of raw material $80,000 Direct labor cost $61,000 Actual manufacturing overhead costs, including indirect $74,000 material of $5,000 Machine hours 33,600 hours Beginning Ending Inventories: Raw materials $19,000 $15,000 Work in progress $38,000 $26,000 Finished goods $43,000 $28,000 Required: a) Compute the predetermined overhead rate for the year and compute the amount of underapplied or overapplied overhead for the year. b) Prepare a schedule of cost of goods manufactured for the year. c) Prepare the journal entry to adjust the underapplied or overhead and also a schedule of cost of goods sold for the year. d) For one of the jobs in January, it had used direct material of $4,000 and direct labor of $6,000. It has spent 300 machine hours. How much is the price of the job if the usual markup percentage on total costs is 30%?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 9P: Channel Products Inc. uses the job order cost system of accounting. The following is a list of the...
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