Overhead Application and Job-Order Costing Heurion Company is a job-order costin
ID: 2446833 • Letter: O
Question
Overhead Application and Job-Order Costing
Heurion Company is a job-order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows:
Overhead
$789,000
Direct labor hours
100,000
Heurion worked on five jobs in July. Data are as follows:
Job 741
Job 742
Job 743
Job 744
Job 745
Balance, July 1
$29,870
$55,215
$27,880
$0
$0
Direct materials
$25,500
$39,800
$14,450
$13,600
$8,420
Direct labor cost
$61,300
$48,500
$28,700
$24,500
$21,300
Direct labor hours
4,000
3,400
1,980
1,600
1,400
By July 31, Jobs 741 and 743 were completed and sold. The remaining jobs were in process.
Required:
1.
Calculate the plantwide overhead rate for Heurion Company. Round to the nearest cent.
2.
Prepare job-order cost sheets for each job showing all costs through July 31. Round all amounts to the nearest dollar.
3.
Calculate the balance in Work in Process on July 31.
4.
Calculate Cost of Goods Sold for July.
Calculate the plantwide overhead rate for Heurion Company. Round to the nearest cent.
Overhead
$789,000
Direct labor hours
100,000
Explanation / Answer
1. plant overhead rate is = Manufacturing over cost/Direct labour hour
=789000/100000
=$7.89
2. in case of job 741
Direcvt material =25500
Direct labou cost= 61300
Overhead cost= $7.89 X 4000=$31560
Total $118360
in case of Job 743
Direct material cost =14450
Direct Labour Cost=28700
Direct Overhead cost = $7.89 X 1980= 15622.2
Total $58772
Similarly other Cost sheet were made
3.
WIP
Direct material of job 742,744,745 resp = 39800+13600+8420=$61820
Direct Labour cost of job 742,744,745 resp= 48500+24500+21300= $94300
Direct over head cost = 7.89X3400+7.89X1600+7.89X1400
=26826+12624+11046=50496
Total = 61820+94300+50496= 206616
4. COGS= begining inventory+ purchase made during the period-ending inventory
begining inventory of job 741, 743=29870+27880=57750
Direct material cost on sale of job 741,743 =25500+14450=39950
Direct labour cost on sale of job 741, 743=61300+28700=90000
Direct overhead cost of job 741, 743=7.89x4000+7.89x1980
=31560+15622.2=47182
total= $234882
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