8. The following information is for Punta Company for July: Factory overhead costs were applied to jobs at the predetermined rate of $42.50 per labor hour. Job S incurred 6,175 labor hours; Job T used 4,275 labor hours. Job S was shipped to customers during July. Job T was still in process at the end of July. The overapplied or underapplied overhead to the Cost of Goods Sold account was closed at the end of July. Factory utilities, factory depreciation, and factory insurance incurred are summarized as follows: Utilities $ 14,250 Depreciation 45,000 Insurance 18,000 Total $ 77,250 f. Direct materials and indirect materials used are as follows: Job S Job T Total Material A $ 28,500 $ 71,250 $ 99,750 Material B 12,000 35,000 47,000 Subtotal $ 40,500 $ 106,250 $ 146,750 Indirect materials 211,000 Total $ 357,750 g. Direct labor incurred for the two jobs and indirect labor are as follows: Job S $ 55,500 Job T 45,000 Indirect labor 133,000 Total $ 233,500 Required: 1. Calculate the total manufacturing cost for Job S and Job T for July. (Round your intermediate calculations and final answers to 2 decimal places.) 2. Calculate the amount of overapplied or underapplied overhead and state whether the Cost of Goods Sold account will be increased or decreased by the adjustment.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
8.
The following information is for Punta Company for July:
Factory overhead costs were applied to jobs at the predetermined rate of $42.50 per labor hour. Job S incurred 6,175 labor hours; Job T used 4,275 labor hours.- Job S was shipped to customers during July.
- Job T was still in process at the end of July.
- The overapplied or underapplied overhead to the Cost of Goods Sold account was closed at the end of July.
- Factory utilities, factory
depreciation , and factory insurance incurred are summarized as follows:
| Utilities | $ | 14,250 | |
| Depreciation | 45,000 | ||
| Insurance | 18,000 | ||
| Total | $ | 77,250 | |
f. Direct materials and indirect materials used are as follows:
| Job S | Job T | Total | |||||||
| Material A | $ | 28,500 | $ | 71,250 | $ | 99,750 | |||
| Material B | 12,000 | 35,000 | 47,000 | ||||||
| Subtotal | $ | 40,500 | $ | 106,250 | $ | 146,750 | |||
| Indirect materials | 211,000 | ||||||||
| Total | $ | 357,750 | |||||||
g. Direct labor incurred for the two jobs and indirect labor are as follows:
| Job S | $ | 55,500 | |
| Job T | 45,000 | ||
| Indirect labor | 133,000 | ||
| Total | $ | 233,500 | |
Required:
1. Calculate the total manufacturing cost for Job S and Job T for July. (Round your intermediate calculations and final answers to 2 decimal places.)
2. Calculate the amount of overapplied or underapplied overhead and state whether the Cost of Goods Sold account will be increased or decreased by the adjustment.
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