Tidy Furniture Company Uses a Job Costing System Tidy Applies Overhead to Production Based on Direct Labor Cost

question 56

Essay

Tidy Furniture Company uses a job costing system. The following debits (credits) appeared in the Work-in-Process Inventory account for June 2020:
$$\begin{array} { l l r l } & \text { Description } & \text { Debits } & \text { Credits } \\\text { June 1 } & \text { Balance } & \$ 20,000 & \\\text { Entire month } & \text { Direct Materials } & 80,000 & \\\text { Entire month } & \text { Direct Labor } & 60,000 & \\\text { Entire month } & \text { Marufacturing overhead } & 45,000 & \\\text { Entire month } & \text { Transferred out } & & \$ 120,000\end{array}$$
Tidy applies overhead to production based on direct labor cost at a predetermined rate of 75%. Job 1000, the only job still in process at the end of June, has been charged with direct labor of $30,000. Tidy's Manufacturing Overhead account showed a credit balance of $10,000 at the end of June 2020.
Required:
(a) Calculate the amount of direct materials charged to Job 1000.
(b) Compute the actual overhead for June 2020.

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Definitions:

Buffer

A temporary storage area in computing used to manage data being transferred between two devices or processes.

Active Voice

A sentence structure where the subject performs the action of the verb, leading to clear and direct communication.

Passive Voice

A sentence construction where the subject of the sentence is acted upon by the verb, often hiding the action's performer.

Goodwill Conclusion

The final part of a communication that expresses friendly intent and seeks to maintain a positive relationship with the audience.