O'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at...
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O'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O'Leary uses a normal job costing system. Direct labor at O'Leary is paid $18 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows: Direct labor-hours worked Year 1 69,100 Year 2 54,100 Manufacturing overhead costs incurred Indirect labor Employee benefits $2,761,000 $1,450,500 1,036,000 811,000 Supervision Supplies Power Heat and light Depreciation. 691,000 541,000 552,100 582,100 138,100 138,100 716,350 776,350 1,982,600 751,350 $8,628,500 1,982,600 751,350 $7,033,000 Property taxes and insurance Total manufacturing overhead costs At the beginning of year 3, O'Leary has two jobs, which have not yet been delivered to customers. Job MC-270 was completed on December 27, year 2. It is scheduled to ship on January 7, year 3. Job MC-275 is still in progress. The predetermined rate in year 2 was $120 per direct labor hour. Data on direct material costs and direct labor-hours for these jobs in year 2 follow: Direct material costs Direct labor-hours Job MC-270 $ 270,100 2,510 hours Job MC-275 $495,100 3,210 hours During year 3, O'Leary incurred the following direct material costs and direct labor hours for all jobs worked in year 3, including the completion of Job MC-275. Direct material costs Direct labor-hours Actual manufacturing overhead $ 11,850,000 74,100 $ 9,119,000 For the purpose of computing the predetermined overhead rate, O'Leary uses the previous year's actual overhead rate. At the end of year 3, there were four jobs that had not yet shipped. Data on these jobs follow: Direct materials Job status Direct labor-hours MC-389 $43,300 1,750 hours Finished MC-390 $67,100 1,955 hours Finished MC-397 $103,600 5,359 hours In progress MC-399 $29,000 1,310 hours In progress Required: O'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O'Leary uses a normal job costing system. Direct labor at O'Leary is paid $18 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows: Direct labor-hours worked Year 1 69,100 Year 2 54,100 Manufacturing overhead costs incurred Indirect labor Employee benefits $2,761,000 $1,450,500 1,036,000 811,000 Supervision Supplies Power Heat and light Depreciation. 691,000 541,000 552,100 582,100 138,100 138,100 716,350 776,350 1,982,600 751,350 $8,628,500 1,982,600 751,350 $7,033,000 Property taxes and insurance Total manufacturing overhead costs At the beginning of year 3, O'Leary has two jobs, which have not yet been delivered to customers. Job MC-270 was completed on December 27, year 2. It is scheduled to ship on January 7, year 3. Job MC-275 is still in progress. The predetermined rate in year 2 was $120 per direct labor hour. Data on direct material costs and direct labor-hours for these jobs in year 2 follow: Direct material costs Direct labor-hours Job MC-270 $ 270,100 2,510 hours Job MC-275 $495,100 3,210 hours During year 3, O'Leary incurred the following direct material costs and direct labor hours for all jobs worked in year 3, including the completion of Job MC-275. Direct material costs Direct labor-hours Actual manufacturing overhead $ 11,850,000 74,100 $ 9,119,000 For the purpose of computing the predetermined overhead rate, O'Leary uses the previous year's actual overhead rate. At the end of year 3, there were four jobs that had not yet shipped. Data on these jobs follow: Direct materials Job status Direct labor-hours MC-389 $43,300 1,750 hours Finished MC-390 $67,100 1,955 hours Finished MC-397 $103,600 5,359 hours In progress MC-399 $29,000 1,310 hours In progress Required:
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