Reference no: EM132639699

Wind Power Ltd uses a job order costing system. During the month of July, Wind Power Ltd has only one job A254. This job was started in late June and completed on 26 July.

Following are the cost information for job A254, other July costs, and relevant annual estimates.

Material issued: $10,000
(75% for direct use on job A254 and
25% for indirect use through July)

Labour

Direct labour for job A254
(300 DLH @$25 per DLH) $7,500
Indirect labour for July $450

Other July costs

Depreciation (40% Factory and 60% Administrative) $2,000
Others (80% Factory and 20% Administrative) $800

Overhead cost driver: Direct Labour Hour (DLH)

Estimated Annual Overhead $45,000
Estimated Annual DLH $3,000
Mark-up as a percent of cost 25%

Required

Question 1: Compute the overhead to be applied for July to job A254 upon completion on 26 July.

Question 2: Calculate the total manufacturing costs for July for job A254

Question 3: Prepare the journal entry when job A254 was completed on 26 July, assuming that the balance of work-in-process inventory for job A254 on 1 July was $1,200.

Question 4: Determine the profit on job A254 when it was sold on 26 July.

Question 5: Compute the under- or over-applied overhead for July.