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.)

Answer 1

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