The following information applies to the O'Donnell Company for March production. There are only two jobs (X

Question:

The following information applies to the O'Donnell Company for March production. There are only two jobs (X and Y) in production in March.

a. Purchased direct materials and indirect materials with the following summary of receiving reports:

Material A......................................$16,000

Material B.......................................12,000

Indirect materials.................................3,000

Total............................................$31,000

b. Issued direct materials and indirect materials with this summary of requisitions:

____________________Job X............Job Y.............Total

Material A...............$ 8,000.......$16,000.......$24,000

Material B..................3,000..........8,000.........11,000

Subtotal..................$11,000........$24,000......$35,000

Indirect materials........................................39,000

Total......................................................$74,000

c. Factory labor incurred is summarized by these time tickets:

Job X......................$22,000

Job Y........................15,000

Indirect labor..............28,000

Total.......................$65,000

d. Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows:

Utilities.............................$ 3,000

Depreciation........................18,000

Insurance.............................2,500

Total...............................$23,500

e. Factory overhead costs were applied to jobs at the predetermined rate of $46 per machine hour. Job X incurred 1,100 machine hours; Job Y used 800 machine hours.

f. Job X was completed; Job Y was still in process at the end of March. The company closed the over-applied or under-applied overhead to the Cost of Goods Sold account at the end of March.

Required

1. Calculate the total manufacturing cost for Job X and Job Y for March.

2. Calculate the amount of over-applied or under-applied overhead and state whether the Cost of Goods Sold account will be increased or decreased by the adjustment.

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Related Book For  book-img-for-question

Cost Management A Strategic Emphasis

ISBN: 978-0077733773

7th edition

Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins

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