Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

eBook Print Item Question Content Area Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the

eBook

Print Item

Question Content Area

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $420,000, and budgeted direct labor hours were 24,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Job 39 Job 40 Job 41 Job 42
Beginning balance $23,900 $35,700 $15,000 $1,000
Materials requisitioned 17,300 23,200 10,800 13,100
Direct labor cost 8,400 20,300 5,450 4,000

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 120 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.image text in transcribed

1. Calculate the overhead rate based on direct labor cost. % of direct labor cost 2. Set up a simple job-order cost sheet for all jobs in process during June. Naranjo Company Job-Order Cost Sheets New budgeted direct labor cost = : New overhead rate =% of direct labor cost How would the cost of the jobs be affected

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting The Impact On Decision Makers

Authors: Curtis L. Norton, Gary A. Porter

6th Edition

9781439037119, 1439037116

More Books

Students also viewed these Accounting questions

Question

2. State three prevailing theories of leadership

Answered: 1 week ago