Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job or
ID: 2331182 • Letter: O
Question
Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs Work in Processon 3/1 Balance Job 33 Job 34 $ 7,500 6,000 $ 13,500 Source documents revealed the following during March: Materials Requisitions Labor Time Forms Tickets Status of Job at Month-End Job 33 $ 3,500 s 6,500 Complet Job 33 $ 3,500 S 6,500 Completed and sold Job 346,000 Job 35 Completed, but not sold In process 7,800 3,250 Indirect 1 300210 $ 15,000 $ 19,690 4,200 The company applies overhead to products at a rate of 150 percent of direct labor cost. Required: 1. Compute the cost of Jobs 33, 34, and 35 at the end of the month. Total Manufacturing Cost Job 33 Job 34 Job 35Explanation / Answer
Answer-1 Calculation of Cost of Job 33,34 & 35
Overhead Has to be Allocate to Product at 150 % of Direct Labour cost. Which is $ 6500 For JOB 33 , $7800 For JOB 34, $3250 For JOB 35.
Overhead
JOB 33 = $6,500*150% = $9,750
JOB 34 = $7,800*150%= $11,700
JOB 35= $3,250*150%= $4,875
Direct Cost
JOB 33 = Material Requistion Form ( $3,500) + Labour Time Ticket ($6,500) = $10,000
JOB 34 = Material Requistion Form ( $6,000) + Labour Time Ticket ($7,800) = $13,800
JOB 35 = Material Requisition Form ( $ 4,200)+Labour Time Ticket ($ 3,250) = $ 7,450
1. Cost Of Manufacturing-
Formula = (Direct Cost + Overhead +Opening WIP-Closing WIP)
JOB 33 = $ 10,000+$9750+$7,500-NIL = $27,250
JOB 34 = $ 13800+ $ 11,700+$6000-NIL = $ 31,500.
JOB 35 = $ 7450 + $4,875+NIL-NIL = $ 12,325
2. (a) Work In Progress
JOB 35 Is in process so we will consider cost of this product as closing WIP i.e (Direct Cost + Overhead) = $ 12 ,325
(b) Finished Goods Inventory
A produt has been completed but not sold so it means this product we have kept as finished goods so we will consider this cost as cost of finished good.
Formula = Opening Finished goods + Finished Goods Produce During Month - Sold Goods.
= NIL + $ 27250 ( JOB 33) + $ 31,500 ( JOB 34 ) - $ 27250 ( JOB 33) = $ 31, 500 ( Finished Goods)
3. Cost of Goods Sold.
Cost Of Good sold Include all Direct Exp. Which were incurred For Good,
Formula = Opening WiP +Cost incurred During the Month-Closing WIP
= $ 27250+ $ 31500+ $ 12325- $ 12325 = $ 58,750
=
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