3.17.2Job Costing extra egs solns

# 3.17.2Job Costing extra egs solns - Job Costing Extra...

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1 Job Costing Extra Problems

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2 Problem 1: Paxton Company Budgeted direct labour hours: 15 000 Budgeted overhead: \$180 000 Cost information for Job K456 (completed during year): Direct materials cost \$2 340 Direct labour cost \$3 600 Average wage rate \$10 per hour
3 Actual direct labour hours: 15 400 Actual overhead costs for the year: Equipment lease \$ 5 000 Depreciation \$ 20 000 Indirect labour \$100 000 Utilities \$ 15 000 Other \$ 45 000 Total \$185 000

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4 Required 1. Calculate the predetermined overhead rate for the year. 2. Calculate the total cost of Job K456. 3. Is overhead over or under- applied? By how much?
5 Problem 1: Solution 1. Predetermined overhead rate: \$180 000 / 15 000 = \$12 per direct labour hour 2. Job K456 Direct materials \$ 2 340 Direct labour \$ 3 600 (= \$10 x 360 DLH) Overhead \$ 4 320 (= \$12 x 360 DLH) Total \$10 260 3. Actual overhead: \$185 000 Applied overhead: \$184 800 (=\$12 x 15 400 DLH) Under-applied by \$ 200

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6 Problem 2: Stanley Company \$ Sales 99 500 Direct labour 31 500 Factory insurance 1 050 Commissions paid 5 500 Factory supervision 6 675 Interest on loan 2 400 Admin. expenses 6 125 Material handling 11 235 Purchases of materials 45 000 Purchases of supplies 2 500
7 Inventories \$ Materials, 1 Jan 2008 10 425 Materials, 31 Dec 2008 28 500 Supplies, 1 Jan 2008 4 900 Supplies, 31 Dec 2008 3 150 Work-in-process, 1 Jan 2008 37 500 Work-in-process, 31 Dec 2008 42 750 Finished goods, 1 Jan 2008 20 055 Finished goods, 31 Dec 2008 12 750

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8 Budgeted manufacturing overhead costs: \$25 000 Estimated direct labour hours: 1 500 Actual direct labour hours: 1 260 Tax rate: 30% Required: 1. Prepare a statement of cost of goods manufactured 2. Prepare an income statement
Stanley Company Statement of Cost of Goods Manufactured For the year ended 31 December 2008 \$ \$ \$ Direct materials: Materials, 1 Jan 10 425 Add: Purchases 45 000

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