Budgeted Actual Direct Labor Hours 10,000 11,000 Direct Labor cost $100,000 $110
ID: 2479398 • Letter: B
Question
Budgeted Actual
Direct Labor Hours 10,000 11,000
Direct Labor cost $100,000 $110,000
Overhead $100,000 $ 90,000
Administrative costs $ 50,000 $ 55,000
Other Information:
Beginning Raw Materials: $50,000
Beginning WIP (Job 1) $75,000
Beginning FG (Job X) $112,000
Raw Materials Purchases during the year - $450,000
Job Information (in no particular order)
Labor Hours Materials
Job1 900 $ 60,000
Job2 2,500 $125,000
Job3 1,400 $ 50,000
Job4 4,000 $125,000
Job5 900 $ 25,000
Job6 1,300 $ 90,000
Total 11,000 $475,000
Note: Jobs X,1,2 & 6 were sold for $850,000
Job 4 was completed but not sold at year end.
Compute Operating Income
Explanation / Answer
Job 1 Job 2 Job 3 Job 4 Job 5 Job 6 Job X Total Material 60,000 125,000 50,000 125,000 25,000 90,000 475,000 Opening WIP 75,000 75,000 Direct Labour Cost 9,000 25,000 14,000 40,000 9,000 13,000 110,000 Overhead Cost 7,364 20,455 11,455 32,727 7,364 10,636 90,000 (90000/11000 hrs) Closing WIP (75,455) (75,455) Total Manufacturing Cost 151,364 170,455 - 197,727 41,364 113,636 - 674,545 Administration Overhead 12,342 13,898 - 16,122 3,373 9,265 - 55,000 (distributed in total mfg cost) Total Cost 163,705 184,353 - 213,849 44,736 122,902 - 729,545 Add:-Opening FG 112,000 112,000 Less:- Closing FG 213,849 213,849 Cost of Goods Sold 163,705 184,353 - - 44,736 122,902 112,000 627,696 Sales Value 850,000 Operating Income 222,304
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