Question

Question 48 16 pts Jones Company uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of 2019. Jones estimated the overhead for the year would be $680,000 and that production would use 80,000 machine hours. The following information relates to the month of January: Job A Job B Job C $8,000 $11,000 Work in process, January 1 Direct materials cost $0 $12,000 $18,000 $1,900 $21,000 $29,000 $6,000 Direct labor costs Actual direct labor hours 1,700 2,400 550 Actual machine hours 1,400 2,000 200 Also known: • Raw materials beginning inventory was $4,500. Purchases of raw materials for January are $35,000 • Job C was started on 1/25; Job A and B were finished on 1/29; Job A sold on 1/31. • Finished goods beginning inventory on 1/1 was $32,000. • Actual overhead for January was $31,000.

Answer 1

Part-1

Predetermined Overhead Rtae= Estimated Overhead / Estimated Machine Hour

=680000/80000= $8.50 per Machine Hour

Part-2

Applied Overhead = Actual Machien HourX Predetmined Overhead Rate

=(1400+2000+200)*8.5=$30600

Actual Overhead = $31000

Overhead Head is under applied because Actual Overhead is More than applied Overhead

Part-3

Amout of Under Applied Overhead = Actual Ovrhead- Applied Overhead

31000-30600= $400

Part-4 : Compuation of Cost of Goods Manufactured
Work in process, Jan 1,			$19,000.00
Direct Materials
Raw Materials Invenry, Jan 1,	$4,500.00
Raw Materials Purchases	$35,000.00
total Raw Materials Available for Use	$39,500.00
Less: Raw Materials Invenry, Dec 31, (39500-31900)	$7,600.00
Direct Materials Used (12000+18000+1900)		$31,900.00
Direct Labor (21000+29000+6000)		$56,000.00
Applied Manufacturing Overhead:		$30,600.00
Tototal Manufacturing Costs			$118,500.00
Total Cost of Work in Process			$137,500.00
Less: Work in Process, 31 Dec- Job C (1900+6000+200*8.50)			-$9,600.00
Cost of Goods Manufactured			$127,900.00

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