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Job-Order Costing Ace Custom Jewelry Company uses a job-order cost system. The company applies manufacturing overhead...

Job-Order Costing

Ace Custom Jewelry Company uses a job-order cost system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor hours. The estimated MOH was $135,000 for the year and the estimated direct labor hours were 15,000 hours.

In May, Job #378 was completed. Direct materials totaled $8,500. Total labor costs were $14,000 at $16 per hour.

At the end of the year, it was determined that the company worked 16,000 direct labor hours for the year, and incurred $140,000 in actual factory overhead costs.

REQUIRED:

1. Calculate the predetermined overhead rate for the year (1 point):

2. Determine the amount of overhead charged to all the jobs for the company during the year (1 point):

3. Determine the total amount of under- or over-applied overhead for all the jobs in the year (1 point):

4. Prepare a job cost sheet for Job #378 using the information given above. Assuming that 50 units were completed, determine the unit product cost. (3 points)

Solutions

Expert Solution

1. Calculate the predetermined overhead rate for the year
Predetermiined overhead rate = budgeted overhead/budgeted hours
= 135000/15000
= 9
= 9$ per direct labor hr
2. Determine the amount of overhead charged to all the jobs for the company during the year (1 point):
hours worked * predetermined OH rate
16000*9
144000
144000$
3. Determine the total amount of under- or over-applied overhead for all the jobs in the year (1 point):
x
actual factory OH 140000
applied over hear actual hrs* predetermined rate 16000*9 144000
over applied by -4000

4.

no. of hours worked total labor cost/rate per hr
14000/16
875
875hrs

job378 cost sheet  

direct material 8500
total labor cost 14000
MOH(875*9) 7875
total cost 30375
no. of units 50
units cost for 50 units 607.5

HOPE THIS WAS HELPFUL. DO CONSIDER GIVING THIS A THUMBS UP.

ekkarill92 answered 2 years ago
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