Southwest Industries uses a job order cost system. The following data summarize
ID: 2486711 • Letter: S
Question
Southwest Industries uses a job order cost system. The following data summarize the operations related to production for January 2017, the first month of operations:
Materials requisitioned and factory labor used:
Job
Materials
Factory Labor
201
3,950
3,700
202
4,830
5,000
203
3,200
2,500
204
10,800
9,150
205
6,800
7,000
206
5,000
4,450
For general factory use
1,440
5,500
The factory overhead rate is $60 per machine hour. Machine hours used:
Job
Machine Hours
201
31
202
46
203
36
204
96
205
48
206
31
Jobs completed were 201, 202, 203, and 205.
Required: Prepare a schedule of finished jobs with total cost information and a schedule of unfinished jobs with total cost information.
Job
Materials
Factory Labor
201
3,950
3,700
202
4,830
5,000
203
3,200
2,500
204
10,800
9,150
205
6,800
7,000
206
5,000
4,450
For general factory use
1,440
5,500
Explanation / Answer
General Factory Overhead has been distributed on the basis of machine hours used by the jobs.
The allocation rate = ($1440 + $5500)/288 hours = $24 (approx)
Particulars Finished Jobs Unfinished Jobs Total Job 201 202 203 205 204 206 Material cost (a) $ 3,950.00 $ 4,830.00 $ 3,200.00 $ 6,800.00 $ 10,800.00 $ 5,000.00 $ 34,580.00 Labour cost (b) $ 3,700.00 $ 5,000.00 $ 2,500.00 $ 7,000.00 $ 9,150.00 $ 4,450.00 $ 31,800.00 Machine hours 31 46 36 48 96 31 288 Factory Overhead @ $60/hour (c) $ 1,860.00 $ 2,760.00 $ 2,160.00 $ 2,880.00 $ 5,760.00 $ 1,860.00 $ 17,280.00 General factory overhead @$24/hour (d) $ 744.00 $ 1,104.00 $ 864.00 $ 1,152.00 $ 2,304.00 $ 744.00 $ 6,912.00 Cost of finished job (a+b+c+d) $ 10,254.00 $ 13,694.00 $ 8,724.00 $ 17,832.00 $ 50,504.00 Cost of unfinished job (a + b +c +d) $ 28,014.00 $ 12,054.00 $ 40,068.00Related Questions
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