1. Johnson Inc. is a job-order manufacturing company that uses a predetermined o
ID: 2606827 • Letter: 1
Question
1. Johnson Inc. is a job-order manufacturing company that uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 85,000 and estimated factory overhead is $595,000. The following information is for September of the current year. Job A was completed during September, and Job B was started but not finished.
September 1, inventories
Materials inventory
$
7,600
Work-in-process inventory (All Job A)
31,400
Finished goods inventory
67,500
Material purchases
105,500
Direct materials requisitioned
Job A
66,000
Job B
34,000
Direct labor hours
Job A
4,300
Job B
3,600
Labor costs incurred
Direct labor ($9.00/hour)
71,100
Indirect labor
13,600
Supervisory salaries
6,100
Rental costs
Factory
7,100
Administrative offices
1,900
Total equipment depreciation costs
Factory
7,650
Administrative offices
1,750
Indirect materials used
12,100
1. What is the total cost of Job A? (Do not round intermediate calculations.)
September 1, inventories
Materials inventory
$
7,600
Work-in-process inventory (All Job A)
31,400
Finished goods inventory
67,500
Material purchases
105,500
Direct materials requisitioned
Job A
66,000
Job B
34,000
Direct labor hours
Job A
4,300
Job B
3,600
Labor costs incurred
Direct labor ($9.00/hour)
71,100
Indirect labor
13,600
Supervisory salaries
6,100
Rental costs
Factory
7,100
Administrative offices
1,900
Total equipment depreciation costs
Factory
7,650
Administrative offices
1,750
Indirect materials used
12,100
Explanation / Answer
Particulars Amount Direct materials 97,400 Direct labor 38,700 Overhead allocated 30,100 Total cost of job 1,66,200 Workings: Direct materials Opening wip 31,400 requested 66,000 Total material used 97,400 Direct labor Number of hours 4,300 Rate per hour 9 Direct labor cost 38,700 Overhead applied a Cost base 5,95,000 b estimated labor hours 85,000 c= a/b Overhead rate per hour 7 d number of hours allocated 4,300 e= c*d OH cost to job 30,100
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