Question

ohnson 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 Materials inventory $ 8,600 Work-in-process inventory (All Job A) 33,400 Finished goods inventory 72,500 Material purchases 120,500 Direct materials requisitioned Job A 76,000 Job B 39,000 Direct labor hours Job A 5,300 Job B 3,100 Labor costs incurred Direct labor ($8.50/hour) 71,400 Indirect labor 14,600 Supervisory salaries 7,100 Rental costs Factory 8,100 Administrative offices 2,900 Total equipment depreciation costs Factory 9,150 Administrative offices 3,250 Indirect materials used 13,100 Required: 1. What is the total cost of Job A

Answer 1

$188,900

Step-by-step explanation:

The computation of the total cost of JOb A is shown below:

= Work in process + material requistioned + direct labor + applied overhead

= $33,400 + $76,000 + 5,300 × $8.50 + 5,300 × $617,500 ÷ 95,000

= $33,400 + $76,000 + $45,050 + $34,450

= $188,900