Required information Problem 3-45 Job-Order Costing; Journal Entries (LO 3-2, 3-

Question

Required information Problem 3-45 Job-Order Costing; Journal Entries (LO 3-2, 3-4, 3-5) [The following information applies to the questions displayed below.] Stellar Sound, Inc. which uses a job-order costing system, had two jobs in process at the start of 20x1: job no. 64 ($84,100) and job no. 65 ($53,400). The following information is available a. The company applies manufacturing overhead on the basis of machine hours (based on practical capacity). Budgeted overhead and machine activity for the year were anticipated to be $824,000, and 16,000 hours, respectively b. The company worked on four jobs during the first quarter. Direct materials used, direct labor incurred, and machine hours consumed were as follows: Direct Direct Machine Job No. Material Labor Hours $21,000 $35,000 1,200 700 65,000 2,000 500 64 65 -22,000 44,000 15,000 67 8,800 c. Manufacturing overhead during the first quarter included charges for depreciation ($32,900), indirect labor ($60,000), indirect materials used ($5,000), and other factory costs ($139,700). d. Stellar Sound completed job no. 64 and job no. 65. Job no. 65 was sold on account, producing a profit of $34,800 for the firm. Problem 3-45 Part 4 4. Did the finished-goods inventory increase or decrease during the first quarter? By how much? (Do not round intermediate calculations.) e finished-goods inventory by

Explanation / Answer

Predetermined overhead rate = 824000/16000= Cost of job #64: Beginning work in process 84100 Direct materials 21000 Direct labor 35000 Overhead 61800 =1200*51.5 total cost 201900 finished goods inventory increased by $201900

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