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Script Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labor- hours is used to
Script Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labor- hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows. Direct labor-hours 31,400 Variable overhead costs $345,400 Fixed overhead costs Total overhead 501,200 $846,600 40,000 $440,000 501,200 $941,200 51,100 $ 562,100 501,200 $1,063,300 The expected volume is 40,000 direct labor-hours for the entire year. The following information is for October, when jobs 1011 and 1015 were completed. Inventories, October 1 Raw materials and supplies Work in process (Job 1011) Finished goods Purchases of raw materials and supplies Raw materials Supplies Materials and supplies requisitioned for production Job 1011 Job 1015 Job 1017 Supplies Machine-hours (MH) Job 1011 Job 1015 Job 1017 Direct labor-hours (DLH) Job 1011 $ 43,900 92,900 228,200 630,700 79,300 279,400 233,600 46,300 76,500 $ 635,800 6,214 MH 6,111 MH 3,702 MH 14,020 DLH Job 1015 6,130 DLH Job 1917 3,750 DLH Labor costs Direct labor wages (all hours @ $11) $ 262,900 Indirect labor wages (12,800 hours) 67,200 Supervisory salaries 127,700 Building occupancy costs (heat, light, depreciation, etc.) Factory facilities $ 35,600 Sales and administrative offices 14,170 Factory equipment costs Power $ 21,610 Repairs and maintenance 8,110 Other 9,710 $ 39,430 Required: a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. (Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $24.03 per direct labor-hour. Use this amount in answering requirements [b] through [e].) b. Compute the total cost of Job 1011 when it is finished. c. How much of factory overhead cost was applied to Job 1017 during October? d. What total amount of overhead was applied to jobs during October? e. Compute actual factory overhead incurred during October. f. At the end of the year, Script Company had the following account balances:
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