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.

September 1 inventories

Material inventory $7500
Work in process inventory (All Job A) $31,200
Finished goods inventory $67,000
Material purchases $104,000
Direct materials requisitioned Job A $65000 Job B $33500
Direct labor hours Job A $4200 Job B $3500
Labor Costs incurred Direct labor($8.50/hour) $65450
Indirect labor $13500
Supervisory salaries $6000
Rental cost Factory $7000
Administrative offices $1800
Total equipment depreciation costs Factory 7500
Administrative office 1600
Indirect material uses 12000

Required:
a. What is the total cost of Job A
b. What is the total factory overhead applied during September?
c. What is the overapplied or underapplied for September?

Answer 1

See below

Step-by-step explanation:

1. Total cost of job A

Direct materials requisition $65,000

Add direct labor cost $65,450

(4,200 × $8.5)

Add applied overheads