Question
Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For
Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 91,000 and estimated factory overhead is $591,500. The following information is for September of the current year. Job A was completed during September, and Job B was started but not finished.
September 1, inventories
Materials inventory$8,200
Work-in-process inventory (All Job A)32,600
Finished goods inventory70,500
Material purchases114,500
Direct materials requisitionedJob A72,000
Job B37,000
Direct labor hoursJob A4,900
Job B4,200
Labor costs incurred
Direct labor ($8.50/hour)77,350
Indirect labor14,200
Supervisory salaries6,700
Rental costs
Factory7,700
Administrative offices2,500
Total equipment depreciation costsFactory8,550
Administrative offices2,650
Indirect materials used12,700
Required:
1. What is the total cost of Job A?
2. What is the total factory overhead applied during September?
3. What is the overapplied or underapplied overhead for September?
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