Question

Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 95,000 and estimated factory overhead is $617,500. The following information is for September of the current year. Job A was completed during September, and Job B was started but not finished.

Answer 1

September 1,2010, inventories

Materials inventory $ 7,500

Work in process inventory(All job A) 31,200

Finished goods inventory 67,000

Material purchases 104,000

Direct materials requisitioned

job A 65,000

job B 33,500

Direct labor-hours

job A 4,200

job B 3,500

Labor costs incurred

Direct labor($8.50/hour) 65,450

Indirect labor 13,500

Supervisory salaries 6,000

Rental costs

Factory 7,000

Administrative offices 1,800

Total equipment depreciation costs

Factory 7,500

Administrative offices 1,600

Indirect materials used 12,000