17-4 A,B Job
order costing: a comprehensive problem Precision
Instruments, Inc uses job order costing and applies manufacturing
Job order
costing: a comprehensive problem
17.4 A,B Job
order costing: a comprehensive problem - Precision
Instruments, Inc
17.4 A,B Precision Instruments, Inc
Precision Instruments, Inc. uses job order costing
and applies manufacturing overhead to individual jobs by using predetermined
ovrhead rates. In department A, overhead is applied on the basis of machine
hours, and in Department B. on the basis of diret labor hours. At the beginning
of the current year, management made the following budget estimates as a step
toward determining the overhead application rates:
Department A
Department B
Direct labor $420,000 $300,000
Manufacturing overhead $540,000 $412,500
Machine-hours 18,000 1,900
Direct labor hours 28,000 25,000
Production of 4,000 techometers(job no.399) was
started in the middle of January and completed two weeks later.
The cost record for this job show the following
information
Department A
Department B
Job no.399 (4,000 units of product) :
Cost of materials used on job $6,800 $4,500
Direct labor cost $8,100 $7,200
Direct labor hours 540 600
Machine-hour 100 100
Instructions
a. Determine the overhead rate that should b used
for each department in applying overhead costs to job no 399
b. What is the total cost of job no.399 and what is
the unit cos of the product manufactured on this production order?
c. Prepare the journal entries required to record
the sale (on account) of 1,000 of the tachometers to SkiCrft Boats. The total
sales price was $19,500
d. Assume that actual overhead costs for the year
were $517,000 in Department A and $424,400 in Department B. Actual
machine-hours in Department A were 17,000 and actual direct labor hours in
Department B were 26,000 during the year. On the basis of this information.
Determine the over-or under applied overhead in each department for the year.
SOLUTION
PREVIEW
b. What is the total cost of job
no.399 and what is the unit cos of the product manufactured on this production order?
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Total cost of Job no. 399
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Particulars
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Department A
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Department B
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Total
|
|
Cost of materials
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6,800
|
4,500
|
11,300
|
|
Direct labor cost
|
8,100
|
7,200
|
15,300
|
|
Prime cost
|
14,900
|
11,700
|
26,600
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File name: Precision-Instruments-Inc.xls File type: application/vnd.ms-excel Price: $8
