Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial pro

Question

Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 18,000. The average wage rate for direct labor is expected to be $25 per hour. During June, Naranjo Company worked on four jobs Data relating to these four jobs follow: ob 39 Job 40 Job 41 Job 42 Beginning balance Materials requisitioned Direct labor cost $22,600 $33,500 $18,400 $400 20,000 22,800 11,700 12,000 11,100 19,900 6,350 2,900 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 115 percent of cost (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory. Jobs 41 and 42 remain unfinished at the end of the month Required: 1. Calculate the balance in Work in Process as of June 30. 2. Calculate the balance in Finished Goods as of June 30.

Explanation / Answer

Job 39 Job 40 Job 41 Job 42 No of hours                        444.00                              796.00                       254.00                       116.00 Beg. Balance ?             22,600.00 ?                    33,500.00 ?            18,400.00 ?                  400.00 Material ?             20,000.00 ?                    22,800.00 ?            11,700.00 ?            12,000.00 Direct labour   ?             11,100.00 ?                    19,900.00 ?               6,350.00 ?              2,900.00 Overheads ?               5,550.00 ?                      9,950.00 ?               3,175.00 ?              1,450.00 Total Costs ?             59,250.00 ?                    86,150.00 ?            39,625.00 ?            16,750.00 Status Sold Inventory WIP WIP Balance in WIP ?                    56,375.00 Balance in FG ?                    86,150.00 COGS sold ?                    59,250.00 Price Charged ?                    68,137.50 If payment for job 40 would have been done then finished goods have been worth NIL. Balance in COGS will be   ?                 145,400.00

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