Logan Company Uses a Job Order Costing System Job 19 for 100 Units Is Started in Department a Rate

question 60

Essay

Logan Company uses a job order costing system.A predetermined overhead rate of $7 per machine hour in Department A and 220 percent per direct labor dollar in Department B has been established based upon the following information at the beginning of the year:
$\begin{array}{lrrr}&\text { Department A } & \text { Department B} \\\text { Estimated overhead } & \$ 40,600 & \$ 88,000 \\\text { Estimated machine hours } & 5,800 & 12,500 \\\text { Estimated direct labor dollars } & \$ 40,000 & \$ 40,000 \\\text { Estimated direct labor hours } & 5,000 & 3,125\end{array}$

Job 19 for 100 units is started in Department A and completed in Department B.Determine the total cost of Job 19 and complete the job cost card based on the following information:
$\begin{array}{lrr}&\text { Department A } & \text { Department B} \\\text { Direct materials } & \$ 800 & \$ 950 \\\text { Direct labor dollars } & \$ 490 & \$ 180 \\\text { Direct labor hours } & 30 & 12 \\\text { Machine hours } & 15 & 30\end{array}$

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Definitions:

Units

A measure of quantity, such as items or products, used in business operations and accounting.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Fixed Cost

Costs that do not vary with the production volume or level of services provided, such as rent, salaries, and insurance.

Salary

Salary refers to a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.