Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Johnson Company applies overhead to products using direct labor hours as the activity level. During 2019, Johnson Company had the following estimated costs: Direct materials

Johnson Company applies overhead to products using direct labor hours as the activity level. During 2019, Johnson Company had the following estimated costs: Direct materials .................... $278,000 Direct labor ........................ 255,000 (15,000 hours expected) Advertising ......................... 37,000 Rent on factory building ............ 38,000 Depreciation .................... ... 60,000 Indirect materials .................. 20,000 Sales commissions ................... 40,000 Production supervisor's salary ...... 50,000 Insurance on factory equipment ...... 18,000 CEO's salary ........................ 95,000 The following additional information is available: 1. 30% of the depreciation relates to equipment in the administrative offices while 70% of the depreciation relates to equipment in the factory. 2. Direct laborers are paid $17 per hour. During 2019, Johnson Company began work on three jobs. Information relating to these three jobs appears below: Job #359 Job #360 Job #361 direct materials .............. $98,000 $75,000 $91,000 direct labor hours ............ 4,700 6,000 5,800 By the end of 2019, job #360 and job #361 had been completed. Job #359 was not completed by the end of 2019. Additionally, by the end of 2019, job #360 had been sold while job #361 was not sold. Johnson Company had total actual overhead cost of $193,000 during 2019. Calculate the cost of goods sold reported by Johnson Company for 2019 after the overhead variance has been closed.

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

Management Control Systems Performance Measurement Evaluation And Incentives

Authors: Kenneth Merchant, Wim Van Der Stede

3rd Edition

0273737619, 978-0273737612

More Books

Students also viewed these Accounting questions

Question

How can evaluation of LMD become more than an act of faith?

Answered: 1 week ago