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Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $437,500, and budgeted direct labor hours were 25,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $25,100 $35,500 $16,500 $0 Materials requisitioned 20,000 23,400 8,800 13,800 Direct labor cost 11,100 20,500 3,450 4,700 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 115 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: 1. Calculate the balance in Work in Process as of June 30. $fill in the blank 1 2. Calculate the balance in Finished Goods as of June 30. $fill in the blank 2 3. Calculate the cost of goods sold for June. $fill in the blank 3 4. Calculate the price charged for Job 39. Round your answer to the nearest cent. $fill in the blank 4 5. What if the customer for Job 40 was able to pay for the job by June 30

Sagot :

anthougo

Answer:

Naranjo Company

1. Balance in Work in Process as of June 30:

= $51,325

2. Balance in Finished Goods as of June 30:

= $89,650

3. Cost of goods sold for June:

= $61,750

4. Price charged for Job 39

= $71,012.50 ($61,750 * 115%)

5. If the customer for Job 40 was able to pay for the job by June 30, there will be zero balance in the Finished Goods Inventory while the cost of goods sold will increase to $151,400.

Explanation:

a) Data and Calculations:

Budgeted overhead for the year = $437,500

Budgeted direct labor hours = 25,000

Average wage rate for direct labor = $35

Budgeted direct labor costs = $875,000 (25,000*$35)

                                      Job 39      Job 40       Job 41       Job 42   Total

Beginning balance       $25,100    $35,500     $16,500      $0         $77,100

Materials requisitioned 20,000      23,400         8,800    13,800      66,000

Direct labor cost              11,100       20,500        3,450      4,700      39,750

Overhead cost                5,550        10,250         1,725      2,350       19,875

Total costs                   $61,750     $89,650    $30,475 $20,850 $202,725

Overhead Rate based on a percentage of direct labor

= Estimated overhead /Budgeted direct labor cost * 100

= $437,500/$875,000 * 100 = 50%

Balance in Work in Process as of June 30:

Job 41  $30,475

Job 42 $20,850

Total     $51,325

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