Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead costs to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,240,200 in manufacturing overhead cost at an activity level of 573,000 machine-hours.
The company spent the entire month of January working on a large order for 8,400 custom made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow:
a. Raw materials requisitioned for production, $261,000 (80% direct and 20% indirect).
b. Labor cost incurred in the factory, $174,000, of which $58,000 was direct labor and $116,000 was indirect labor.
c. Depreciation recorded on factory equipment, $63,500.
d. Other manufacturing overhead costs incurred, $85,100 (credit Accounts Payable).
e. Manufacturing overhead cost was applied to production on the basis of 40,900 machine-hours actually worked during the month.
f. The completed job was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead.)
Required:
1. Calculate the Actual Manufacturing Overhead Costs Incurred.
Actual Manufacturing Overhead Costs Incurred: $
2. Compute the amount of Manufacturing Overhead Applied to Production.
Manufacturing Overhead Applied to Production: $
3. Calculate the total Manufacturing Cost for the job completed in January.
Manufacturing Cost for the job: $
4. Compute the unit product cost that will appear on the job cost sheet. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Unit product cost: $ per unit
Req 1: | |||||
Actual manufacturing Ovevrheads incurred: | |||||
Indirect material (261000*20%) | 52200 | ||||
Indirect Labour | 116000 | ||||
Depreciation | 63500 | ||||
Other manufacturing OH | 85100 | ||||
Actual OH incurred | 316800 | ||||
Req 2: | |||||
Pre-determined OH rate: Estimated OH/ Estimated Machine hours | |||||
4240200 /573000 = $7.40 per MH | |||||
Oh applied: Actual machine hours worked: 40900 MH | |||||
OH rate per MH: 7.40 per MH | |||||
OH applied (40900 MH @7.40): | 302660 | ||||
Req 3: | |||||
Total Mnaufacturing Cost: | |||||
Direct material | (261000*80%) | 208800 | |||
Direct labour | 58000 | ||||
OH applied | 302660 | ||||
Total Manufacturing OH | 569460 | ||||
Req 4: | |||||
Total Manufacturing cost | 569460 | ||||
Divide: Number of units | 8400 | ||||
Unit product cost | 67.79 |
Get Answers For Free
Most questions answered within 1 hours.