Reference no: EM133127870
Question - Yamuna Fabricating Company uses a job-order costing system and a predetermined overhead rate based on direct labour-hours as the production process heavily relies on a skilled workforce.
At the beginning of the year, the company estimated manufacturing overhead for the year would be $568,000 and labour hours would be 40,000 hours.
The following information pertains to February of the current year:
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JOB-X10
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JOB-X11
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JOB-X12
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WIP February 1
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$12,000
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$16,000
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$21,000
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Materials used during March
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10,800
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7,200
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8,300
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Direct Labour used
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3,200
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4,800
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5,700
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Machine hours
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390
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420
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450
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Direct Labour hours
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2,500
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1,700
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1,800
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Required -
A) Calculate the predetermined overhead rate (POHR).
B) Complete a brief job-order cost sheet for the 3 jobs for February. (Hint: this requires applying overhead using the rate calculated in part 1 above).
C) At the end of February Jobs X10 and Job X11 were completed, and Job X11 was sold and delivered to a customer - show the ending balances of the Work in Process and Finished Goods inventory accounts (assume no beginning Finished Goods inventory).
D) If actual manufacturing overhead costs are $90,000, what is the amount of overhead variance? Is it Over or Under applied overhead for February?
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