Question

During the month of May, the following transactions occurred: 1 Requisitioned materials totaling $24,500 for use in production. Of the total, $9,200 was for Job 58, $8,900 for Job 59, and the remainder for Job 60. 2 Incurred direct labor of $32,400, with an average wage of $18 per hour. Job 58 used 800 hours; Job 59, 600 hours; and Job 60, 400 hours. 3 Incurred and paid actual overhead of $17,880 4 Charged overhead to production at the rate of $4.80 per direct labor hour. Prepare brief job-order cost sheets for Jobs 58, 59, and 60, with the following requirements: * Subtotals for both rows and columns, i.e. Totals should be summed by JOB, and Totals should be summed by COST element (DM, DL, OH). * Direct Material for Job 60 should be a FORMULA... not a hard-keyed number. * Direct Labor for all jobs should be a FORMULA...not a hard-keyed number. * Applied Overhead for all jobs should be a FORMULA...not a hard-keyed number. * Provide analysis/calculation of Overhead Variance, displaying the variance as absolute value dollars.

Answer 1

Job order cost sheet
		Job 58		Job 59		Job 60		Total
Material		9200		8900		6400		24500
						(24500-9200-8900)
Labour		14400		10800		7200		32400
		(800 x 18)		(600 x 18)		(400 x 18)
Overhead		3840		2880		1920		8640
		(800 x 4.8)		(600 x 4.8)		(400 x 4.8)
Total		27440		22580		15520		65540

Analysis of Overhead variance
Charged Overheads			8640
Actual incurred overheads			17880
Variance			9240 Adverse