Question

The following information applies to the O’Donnell Company for March ­production. There are only two jobs (X and Y) in production in March. Purchased direct materials and indirect materials with the following summary of receiving reports: Material A $ 16,500 Material B 12,250 Indirect materials 3,250 Total $ 32,000 Issued direct materials and indirect materials with this summary of requisitions: Job X Job Y Total Material A $ 8,100 $ 16,200 $ 24,300 Material B 3,100 8,100 11,200 Subtotal $ 11,200 $ 24,300 $ 35,500 Indirect materials 39,250 Total $ 74,750 Factory labor incurred is summarized by these time tickets: Job X $ 22,200 Job Y 15,100 Indirect labor 28,250 Total $ 65,550 Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows: Utilities $ 3,100 Depreciation 18,200 Insurance 2,600 Total $ 23,900 Factory overhead costs were applied to jobs at the predetermined rate of $46.50 per machine hour. Job X incurred 1,100 machine hours; Job Y used 800 machine hours. Job X was completed; Job Y was still in process at the end of March. The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March. Required: 1. Calculate the total manufacturing cost for Job X and Job Y for March. 2. Calculate the amount of overapplied or underapplied overhead and state whether the Cost of Goods Sold account will be increased or decreased by the adjustment.

Answer 1