ACCT 201-Ch 15 Q. 4 ABC Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2014, Job No. 50 was the only job in process. The costs incurred prior to January 1 on Jotb No. 50 were as follows: 1. Direct materials $20,000, 2. Direct labor $12,000, and 3. Manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was the only product in the finished goods inventory There was a $15,000 balance in the Raw Materials Inventory account. During the month of January ABC Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. 2. 1. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. 3. The following additional events occurred during the month (1) Purchased additional raw materials of $90,000 on account. (2) Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes. (3) Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $19,000, and various other manufacturing overhead costs on account $16,000. (4) Assigned direct materials and direct labor to jobs as follows Job No. Direct Materials Direct Labor 50 $%10,000 51 39,000 52 $5,000 25,000 20,000 30,000 Questions: 1. Calculate the predetermined overhead rate for 2014 (Assuming ABC Company estimates total manufacturing overhead costs of $980,000, direct labor costs of $700,000 for the year). 2. What is the total costs of Job 50 and Job 51, respectively? 3. What is the balance of Work-in-Process balance at the end of January? 4. What is the balance of Finished Goods Inventory at the end of January? 5. What is the gross profit for January? 6. For January, does ABC Company under-apply or over-apply manufacturing overhead? ACCT 201-Ch 15 Q. 4 ABC Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2014, Job No. 50 was the only job in process. The costs incurred prior to January 1 on Jotb No. 50 were as follows: 1. Direct materials $20,000, 2. Direct labor $12,000, and 3. Manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was the only product in the finished goods inventory There was a $15,000 balance in the Raw Materials Inventory account. During the month of January ABC Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. 2. 1. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. 3. The following additional events occurred during the month (1) Purchased additional raw materials of $90,000 on account. (2) Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes. (3) Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $19,000, and various other manufacturing overhead costs on account $16,000. (4) Assigned direct materials and direct labor to jobs as follows Job No. Direct Materials Direct Labor 50 $%10,000 51 39,000 52 $5,000 25,000 20,000 30,000 Questions: 1. Calculate the predetermined overhead rate for 2014 (Assuming ABC Company estimates total manufacturing overhead costs of $980,000, direct labor costs of $700,000 for the year). 2. What is the total costs of Job 50 and Job 51, respectively? 3. What is the balance of Work-in-Process balance at the end of January? 4. What is the balance of Finished Goods Inventory at the end of January? 5. What is the gross profit for January? 6. For January, does ABC Company under-apply or over-apply manufacturing overhead