In: Accounting
Haughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on direct labor costs to apply factory overhead to all jobs. During the month of July, the firm processed three jobs: X13, X14, and X15, of which X13 was started in June.
Account | July 1 | July 31 | ||
---|---|---|---|---|
Iventories | ||||
Direct Materials | 38,300 | ? | ||
Work - In - Process | 44600 | ? | ||
Finished Goods | 0 | 0 | ||
COGS | ? | |||
Direct Materials Purchased in July | 73,000 | |||
Materials issued to production: | ||||
X13 | 18,540 | |||
X14 | 38,620 | |||
X15 | 14,900 | |||
Factory Labor Hours used ( 30$/Hour) | ||||
X13 | 4,400 | |||
X14 | 3,700 | |||
X15 | 2,500 | |||
Indirect Labor | 7800 | |||
Other Factory OH Cost Incurred | ||||
Rent | 140,500 | |||
Utilities | 996,000 | |||
Repairs and Maintenace | 197,500 | |||
Depreciation | 140,100 | |||
Other | 65,000 | |||
As of July 31, Job X13 was sold and Jobs X14 and X15 were still in
process.
Total factory overhead applied in July was $1,780,800.
Required:
1. Compute the predetermined factory overhead rate.
2. Compute the amount of the Direct Materials account at the end of July.
3. Compute the actual factory overhead cost incurred during the month of July.
4. Compute the ending balance of the Work-in-Process Inventory account for July.
5. Prepare the Statement of Cost of Goods Manufactured for July.
6. Compute the amount of overapplied or underapplied overhead.
7. What is the cost per unit of Job X13 if it has a total of 100 units?
8. Prepare the Statement of Cost of Goods Sold for July.
Formula sheet
A | B | C | D | E | F | G | H | I | J |
2 | |||||||||
3 | |||||||||
4 | Account | 43282 | 43312 | ||||||
5 | Inventories | ||||||||
6 | Direct Materials | 38300 | ? | ||||||
7 | Work - In - Process | 44600 | ? | ||||||
8 | Finished Goods | 0 | 0 | ||||||
9 | COGS | ? | |||||||
10 | Direct Materials Purchased in July | 73000 | |||||||
11 | Materials issued to production: | ||||||||
12 | X13 | 18540 | |||||||
13 | X14 | 38620 | |||||||
14 | X15 | 14900 | |||||||
15 | Factory Labor Hours used ( 30$/Hour) | ||||||||
16 | X13 | 4400 | |||||||
17 | X14 | 3700 | |||||||
18 | X15 | 2500 | |||||||
19 | Indirect Labor | 7800 | |||||||
20 | Other Factory OH Cost Incurred | ||||||||
21 | Rent | 140500 | |||||||
22 | Utilities | 996000 | |||||||
23 | Repairs and Maintenace | 197500 | |||||||
24 | Depreciation | 140100 | |||||||
25 | Other | 65000 | |||||||
26 | |||||||||
27 | 1) | ||||||||
28 | Since direct labor cost is the basis for overhead allocation, therefore | ||||||||
29 | Predetermined overhead rate | =Total Overhead Applied / Total Labor cost | |||||||
30 | |||||||||
31 | Total Overhead applied | 1780800 | |||||||
32 | Total labor cost | =SUM(D16:D18)*30 | =SUM(D16:D18)*30 | ||||||
33 | |||||||||
34 | Predetermined overhead rate | =Total Overhead Applied / Total Labor cost | |||||||
35 | =D31/D32 | =D31/D32 | |||||||
36 | |||||||||
37 | Total predetermined overhead rate | =D35 | of direct labor cost | ||||||
38 | |||||||||
39 | 2) | ||||||||
40 | |||||||||
41 | Ending Inventory of Direct Materials | =Beginning Inventory + Purchases - Materials used in production | |||||||
42 | =D6+D10-SUM(D12:D14) | =D6+D10-SUM(D12:D14) | |||||||
43 | |||||||||
44 | Ending Inventory of Direct Materials | =D42 | |||||||
45 | |||||||||
46 | |||||||||
47 | 3) | ||||||||
48 | |||||||||
49 | Actual Overhead costs incurred are as follows: | ||||||||
50 | |||||||||
51 | Indirect Labor | =D19 | |||||||
52 | Rent | =D21 | |||||||
53 | Utilities | =D22 | |||||||
54 | Repairs and Maintenace | =D23 | |||||||
55 | Depreciation | =D24 | |||||||
56 | Other | =D25 | |||||||
57 | Total actual manufacturing overhead | =SUM(D51:D56) | |||||||
58 | |||||||||
59 | Hence actual manufacturing overhead is | =D57 | |||||||
60 | |||||||||
61 | 4) | ||||||||
62 | Since Job X13 was sold and was in begnning, therefore the ending work in process will | ||||||||
63 | be total cost of jobs X14 and X15. | ||||||||
64 | |||||||||
65 | Ending work in progress | =Total Cost of Job X14 + Total Cost of Job X15 | |||||||
66 | |||||||||
67 | Total cost of job X14 can be calculated as follows: | ||||||||
68 | Direct materials | =D13 | |||||||
69 | Labor cost | =D17*30 | |||||||
70 | Overhead cost applied | =D69*D37 | |||||||
71 | Total cost of job X14 | =SUM(D68:D70) | =SUM(D68:D70) | ||||||
72 | |||||||||
73 | Total cost of job X15 can be calculated as follows: | ||||||||
74 | Direct materials | =D14 | |||||||
75 | Labor cost | =D17*30 | |||||||
76 | Overhead cost applied | =D75*D37 | |||||||
77 | Total cost of job X15 | =SUM(D74:D76) | =SUM(D74:D76) | ||||||
78 | |||||||||
79 | |||||||||
80 | Ending work in progress | =Total Cost of Job X14 + Total Cost of Job X15 | |||||||
81 | =D71+D77 | =D71+D77 | |||||||
82 | |||||||||
83 | Hence ending work in progress | =D81 | |||||||
84 |