Margin Call, Inc., which uses a job-costing system, is a labor-intensive firm, with many skilled craftspeople on the payroll. Job no. 789 was the only job in process on January 1, having costs of $22,500 as of that date. Direct materials used and direct labor incurred during January were:
Job no. 791 was the only job in production as of January 31.
Required:
A. Should Margin Call use direct labor or machine hours as a cost driver. Why?
B. Assume that the company decided to use direct labor as its cost driver. If the budgeted amounts of direct labor and manufacturing overhead are anticipated to be $200,000 and $300,000, respectively, what is the firm's predetermined overhead rate?
C. Compute the cost of work-in-process inventory as of January 31.
D. Compute the cost of jobs completed during January.
E. Suppose that the company sold all of its completed jobs, adding a 40% markup to cost. How much would the firm report as sales revenue?
Definitions:
Q9: Find Corp and has elected to use
Q17: The following information pertains to the shareholdings
Q24: Marshall Welding uses the step-down method of
Q29: Element Cellars produces wine in northern Oregon.
Q44: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB2504/.jpg" alt=" A) Nil. B)
Q57: Carrington, Inc. began business at the start
Q58: Operating leverage is an important concept for
Q74: Generally speaking, companies prefer doing business with
Q75: Assuming use of the direct method, over
Q77: Costs that are expensed when incurred are