Subject: AFAR

Topic: Job-Order Costing

Easytocomputethisproblem company prepares, packages, and distributes six frozen vegetables in two different sized containers. The different vegetables and different sizes are prepared in large batches. The company employs a normal cost job-order costing system. Manufacturing overhead is assigned to batches by a predetermined rate on the basis of DLH. The manufacturing overhead cost incurred by the company during two years (adjusted for changes using current prices and wage rates) are presented below.

(figures shown are for 2019 and 2020, respectively)

Direct materials placed into production - 13,670,000; 11,650,000

Increase in direct materials - 1,795,000; 2,390,000

DLH - 2,760,000; 2,160,000

Direct labor rate per hour - 9/hour

Overhead rate - 18/hour

Overhead costs are as follows:

Indirect labor - 16,560,000; 12,960,000

Employee benefits - 6,210,000; 4,860,000

Supplies - 4,140,000; 3,240,000

Power - 3,312,000; 2,592,000

Heat and Light - 828,000; 828,000

Supervision - 4,297,500; 3,937,500

Depreciation - 11,895,000; 11,895,000

Property taxes and insurance - 4,507,500; 4,507,500

1. What is the amount of raw materials used?

2. Total actual variable overhead cost for 2019 and 2020, respectively?

3. What is the actual variable overhead rate?

4. The total amount of fixed overhead?

5. What will be the actual total overhead rate for a 2,300,000 DLH level of activity for 2020?

6. Total manufacturing overhead cost for 2019 and 2020, respectively?

7. What is the under/over-applied factory overhead for 2019 and 2020, respectively?