Please do not give solution in image format thanku Job Costs Using a Plantwide Overhead RateNaranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hourswere 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relatingto these four jobs follow:Beginning balanceMaterials requisitionedDirect labor costJob 39Required:$23,800Job 41 Job 42$34,300$19,200 $1,30023,400 12,200 13,6004,50020,500 6,850Job 4018,3009,400Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost.(Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paidwas growing dimmer. Naranjo decided to hold Job 40 in entory while the customer worked out its financial difficulties. Job 40 is the only job inFinished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.1. Calculate the overhead rate based on direct labor cost.% of direct labor cost2. Set up a simple job-order cost sheet for all jobs in process during JuneNaranjo Company 1. Calculate the overhead rate based on direct labor cost.% of direct labor cost2. Set up a simple job-order cost sheet for all jobs in process during June.Naranjo CompanyJob Order Cost SheetsBalance, June 1Job 39TotalJob 40Job 41 Job 42883. What if the expected direct labor rate at the beginning of the year was $24 instead of $30? What would the overhead rate be? If required, roundyour overhead rate answer to one decimal place.New budgeted direct labor cost-fNew overhead rate -How would the cost of the jobs be affected?% of direct labor cost

Solution: a. The overhead rate based on direct labor hours : Direct labor cost = Direct labor hour…

Naranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Beginning balance Materials requisitioned Direct labor cost Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in Dentory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: $23,800 $34,300 18,300 23,400 9,400 20,500 6,850 Job 42 $19,200 $1,300 12,200 13,600 1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 4,500

Naranjo Company designs industrial prototypes for outside companies, Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Beginning balance Materials requisitioned Direct labor cost Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in Dentory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: $23,800 $34,300 18,300 23,400 9,400 20,500 6,850 Job 42 $19,200 $1,300 12,200 13,600 1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 4,500

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter5: Product And Service Costing: Job-order System

Section: Chapter Questions

Problem 2CE: Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year...

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Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was 260,000, and budgeted direct labor hours were 20,000. The average wage rate for direct labor is expected to be 25 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 130 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: 1. Calculate the balance in Work in Process as of June 30. 2. Calculate the balance in Finished Goods as of June 30. 3. Calculate the cost of goods sold for June. 4. Calculate the price charged for Job 39. 5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods? What would happen to the balance of Cost of Goods Sold?
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