Question
JayAjayi Corporation manufactures various machine parts to customer specifications. The company uses a job-order costing system and applies overhead costs to jobs on the basis
JayAjayi Corporation manufactures various machine parts to customer specifications. The company uses a job-order costing system and applies overhead costs to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,215,000 in manufacturing overhead cost at an activity level of 562,000 machine-hours. The company spent the entire month of January working on a large order for 8,600 custom made machine parts. The company had no work in process at the beginning of January. Cost data relating to January follow:
a. | Raw materials requisitioned for production, $258,000 (80% direct and 20% indirect). |
b. | Labor cost incurred in the factory, $156,000, of which $52,000 was direct labor and $104,000 was indirect labor. |
c. | Depreciation recorded on factory equipment, $63,500. |
d. | Factory Rent and Factory Utilities costs incurred, $85,600. |
e. | Manufacturing overhead cost was applied to production on the basis of 40,830 machine-hours actually worked during the month. |
f. | The job was completed, and the 8,600 finished machine parts were moved into the finished goods warehouse on January 31 to await delivery to the customer.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started