a. MOH $4,000 + $10,000 +$12,000+ $2,000+ $24,000 = $52,000 = $2.4762/dl cost $21,000 dl cost b. JOB #705 JOB #706 JOB JOB JOB #707 #708 #709 DM DL $3,000 $10,000 $1,000 $ 20,000 $2,000 $4,000 5,000 6,000 4,000 21,000 MOH 4,952 9,905 12,381 14,857 9,905 52,000 Beg WIP 13,400 14,300 27,700 $20,352 $28,205 $20,381 $30,857 $20,905 $120,700 C. Beg WIP $27,700 + DM 20,000 + DL + MOH -End WIP 21,000 52,000 72,143 $48,557 The Pittman Company manufactures special purpose machines to order. On January 1, there were two jobs in process, #705 and #706. The following costs were applied to these jobs in the prior year: Job No. Direct material 705 $ 5,000 706 $8,000 Direct labor Overhead 4,000 3,000 4,400 3,300 Total $13,400 $14,300 During January, the following transactions took place: Raw material costing $40,000 was purchased on account. Jobs #707, #708, and #709 were started and the following costs were applied to them: JOB 707 708 709 Direct materials $3,000 $10,000 $7,000 Direct labor 5,000 6,000 4,000 * Job #705 and Job #706 were completed after incurring additional direct labor costs of $2,000 and $4,000, respectively Wages paid to production employees during January totaled $25,000. Depreciation for the month of January totaled $10,000. Utilities bills in the amount of $10,000 were paid for operations during December. Utilities bills totaling $12,000 were received for January operations. Supplies costing $2,000 were used. Miscellaneous overhead expenses totaled $24,000 for January. Actual overhead is applied to individual jobs at the end of each month using a rate based on actual direct labor costs. Required: Determine the January overhead rate. Determine the cost of each job. a. b. C. Prepare a statement of cost of goods manufactured. The Western Corporation, began operations on October 1. It employs a job order costing system. Overhead is charged at a normal rate of $2.50 per direct labor hour. The actual operations for the month of October are summarized as follows: Purchases of raw material, 25,000 pieces @ $1.20/piece. a. b. Material and labor costs charged to production: Job No. Units Material Direct labor cost Direct labor hours 101 10,000 $4,000 $6,000 3,000 102 8,800 3,600 5,400 2,700 103 16,000 7,000 9,000 4,500 104 8,000 3,200 4,800 2,400 105 20,000 8,000 3,600 1,800 C. Actual overhead costs incurred: Variable Fixed d. Completed jobs: 101, 102, 103, and 104 Sales-$105,000. All units produced on Jobs 101, 102, and 103 were sold. Required: Compute the following balances on October 31: a. Material inventory b. Work in process inventory C. d. Finished goods inventory Cost of goods sold e. Under- or overapplied overhead $18,500 15,000 ANS: a. $30,000 ($4,000+ $3,600 + $7,000+ $3,200+ $8,000) = $4,200 b. Job #105 $8,000+ $3,600 + ($1,800 x 2.50) = $16,100 C. Job #104 $3,200+ $4,800+ ($2,400 x 2.50) = $14,000 d. Job # 101 102 103 $4,000+ $6,000+ ($3,000 x 2.50) = $3,600 +$5,400 + ($2,700 x 2.50) = $7,000+ $9,000+ ($4,500 2.50) = $17,500 15,750 27,250 $60,500 e. Applied 14,400 x $2.50 = Actual Overapplied $36,000 33,500 $2,500