Job order costing
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A Company uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $180,000 and machine hours used would be 12,000.
The following information pertains to January of the current year:
Job 101 Job 102 Job 103 Totals
Work in process, January 1 $12,000 $19,500 $28,500 $60,000
January production activity:
Materials requisitioned $ 3,000 $ 3,600 $ 5,400 $12,000
Direct labor costs $ 1,800 $ 2,700 $ 3,000 $ 7,500
Machine hours 600 1,050 1,350 3,000
Actual manufacturing overhead costs incurred in January were $46,750.
Required:
a. Compute the predetermined overhead application rate.
b. Determine the total cost associated with each job.
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Solution Summary
The solution explains how to calculate the predetermined overhead application rate and the total cost associated with each job.
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A Company uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $180,000 and machine hours used would be 12,000.
The following information pertains to January of the current year:
Job 101 Job 102 Job 103 Totals
Work ...
Purchase this Solution
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