1. Compute the predetermine factory overhead rate
Job
Labor Hours
X13
3,500
X14
2,800
X15
1,600
Total Labor Hours in the Production
7,900
Direct Labor Cost = Total direct labor cost x Hourly Rate
= 7,900 x 30
= 237,400
Direct Labor Cost x Overhead rate = Overhead Applied
237,000 x Overhead rate = 900,600
Overhead rate = 900,600/237,000
Overhead rate = 3.80
2. Compute the amount of the direct material account at the end of July
Beginning Inventory
36,500
Add: Direct material purchase in July
55,000
Less: Issued to Production
X13
16,380
X14
24,220
X15
14,000
Materials Inventory at end of July
36,900
3. Compute the actual factory overhead cost incurred during the month of July
Indirect Labor (6,900 x 30)
207,000
Rent
131,500
Utility
180,600
Repairs and Maintenance
188,500
Depreciation
131,100
Other
56,000
Actual factory overhead cost in July
894,700
4. Compute the ending balance of the Work-in-Process Inventory account for July
Input Cost
X14
X15
Direct Materials Used in the Production
24,220
14,000
Direct Labor Cost
X14: 2,800 x 30
84,000
X15: 1,600 x 30
48,000
Overhead
X14: 84,000 x 3.80
319,200
X15: 48,000 x 3.80
182,400
Work-in-Process
423,420
244,400
Cost of Job x14 + Cost of Job x15
423,420 + 244,400 = 671,820 Work-in-Process Ending Inventory
5. Prepare the Statement of Goods Manufactured for July
Haughton Company
Statement of Goods Manufactured
For the Month of July
Direct Material Used
Add: Direct Labor
Factory Overhead
Total Manufacturing Cost
Add: Work-in-progress, beginning
Less: Work-in-progress, ending
Cost of Goods Manufactured
54,600
237,000
900,600
1,192,200
41,000
(671,820)
561,380
6. Compute the amount of overapplied or underapplied overhead
Indirect Labor (6,900 x 30)
207,000
Rent
131,500
Utility
180,600
Repairs and Maintenance
188,500
Depreciation
131,100
Other
56,000
Actual factory overhead cost in July
894,700
Overhead Applied
(900,600)
Over Applied
561,380
7. What is the cost per unit of Job X13 if it has a total of 100 unit.
Beginning Work in Process
41,000
Direct Material
16,380
Direct Labor
105,000
Overhead Applied
399,000
Total Cost
561,380
Unit Produced
/100
Total Cost of Job X13
5,614
8. Prepare the Statement of Cost of Goods Sold for July
Haughton Company
Statement of Cost of Good Sold
For the Month of July
Cost of X13 manufactured
Less: Overapplied Overhead
Cost of Goods Sold
561,380
(5,900)
555,480