Question
CompuFurn, Incorporated, manufactures furniture for computer work stations. CompuFurn uses a job-order costing system and employs absorption costing. CompuFurns work-in-process inventory on November 30 consisted
CompuFurn, Incorporated, manufactures furniture for computer work stations. CompuFurn uses a job-order costing system and employs absorption costing. CompuFurns work-in-process inventory on November 30 consisted of the following jobs.
Job Number | Description | Units | Accumulated Cost |
---|---|---|---|
CC723 | Computer caddy | 20,000 | $ 900,000 |
CH291 | Chair | 15,000 | 446,000 |
PS812 | Printer stand | 25,000 | 260,000 |
Total | $ 1,606,000 |
On November 30, the companys finished-goods inventory, which is evaluated using the first-in, first-out (FIFO) method, consisted of four items.
Item | Quantity and Unit Cost | Accumulated Cost |
---|---|---|
Computer caddy | 7,500 units @ $64 each | $ 480,000 |
Chair | 19,400 units @ $35 each | 679,000 |
Printer stand | 21,000 units @ $55 each | 1,155,000 |
Desk | 11,200 units @ $102 each | 1,142,400 |
Total | $ 3,456,400 |
At the end of November, the balance in CompuFurns Materials Inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from the materials inventory during the month of December included the following.
Additions | Raw Materials | Purchased Parts |
---|---|---|
Purchases | $ 242,000 | $ 396,000 |
Requisitions: | ||
Job CC723 | 51,000 | 104,000 |
Job CH291 | 3,000 | 10,800 |
Job PS812 | 125,000 | 87,000 |
Job DS444 (5,000 desks) | 65,000 | 187,000 |
CompuFurn applies manufacturing overhead on the basis of machine hours. The companys manufacturing overhead budget for the year totaled $4,500,000. The company planned to use 900,000 machine hours during this period, which is the firms estimated practical capacity. Through the first 11 months of the year, a total of 831,000 machine hours were used, and actual manufacturing overhead amounted to $4,139,000.
During the month of December, machine hours and labor hours consisted of the following:
Account | Machine Hours | Labor Hours | Labor Cost |
---|---|---|---|
CC723 | 12,000 | 11,600 | $ 122,400 |
CH291 | 4,400 | 3,600 | 43,200 |
PS812 | 19,500 | 14,300 | 200,600 |
DS444 | 14,000 | 12,500 | 138,000 |
Indirect labor | 0 | 3,000 | 29,400 |
Supervision | 0 | 0 | 57,600 |
Total | 49,900 | 45,000 | $ 591,200 |
The jobs completed in December and the unit sales for that month are as follows:
Job Number | Production Items | Quantity Completed | Item | Quantity Shipped |
---|---|---|---|---|
CC723 | Computer caddy | 20,000 | Computer caddy | 17,500 |
CH291 | Chair | 15,000 | Chair | 21,100 |
DS444 | Desks | 5,000 | Printer stand | 18,000 |
Desk | 6,000 |
Case 3-61 (Algo) Part 3 Calculate the cost of the chairs in CompuFurn's Finished-Goods Inventory
3. Calculate the cost of the chairs in CompuFurns Finished-Goods Inventory as of December 31.
4. Actual manufacturing overhead incurred in December amounted to $252,000. Calculate CompuFurns overapplied or underapplied overhead for the year.
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