Sunland Company produces high-quality microscopes for educationand health care uses. The company uses a...

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Sunland Company produces high-quality microscopes for educationand health care uses. The company uses a job order costing system.Because the microscopes’ optics require significant manual labor toensure adherence to strict manufacturing specifications, thecompany applies overhead on the basis of direct labor hours. At thebeginning of 2017, the company estimated its manufacturing overheadwould be $1,960,000 and that employees would work a total of 98,000direct labor hours. During March, the company worked on thefollowing five jobs:
Job Beginning
Balance Direct Materials
added during
March Direct Labor
added during
March Direct Labor Hours
added during
March
134 $118,400 $4,000 $8,300 150
158 121,400 2,700 12,150 370
212 21,900 86,200 36,100 3,400
287 34,400 71,600 31,850 2,790
301 18,860 21,880 1,450
Total $296,100 $183,360 $110,280 8,160

Jobs 134 and 158 were started in January, Jobs 212 and 287 werestarted in February, and Job 301 was started in March. DuringMarch, workers completed Jobs 134, 158, and 212. Jobs 134 and 212were delivered to customers during March.

Actual overhead for the month of March was $177,000. Themanufacturing overhead account is disposed of annually, notmonthly.
1. Calculate the total manufacturing cost for March.
2. Calculate the total cost for each of the five jobs as ofMarch 31.

Answer & Explanation Solved by verified expert

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1. Computation of Manufacturing Cost for March
Job	134	158	212	287	301	Total
Direct material	$4,000	$2,700	$86,200	$71,600	$18,860	$1,83,360
Direct labour	$8,300	$12,150	$36,100	$31,850	$21,880	$1,10,280
Overhead applied	$3,000	$7,400	$68,000	$55,800	$29,000	$1,63,200
Total	$15,300	$22,250	$1,90,300	$1,59,250	$69,740	$4,56,840

Computation of Overhead Applied
Direct Labour Hour	150	370	3400	2790	1450	8160
Recovery Rate	$20	$20	$20	$20	$20	$20
Applied Overhead	$3,000	$7,400	$68,000	$55,800	$29,000	$1,63,200

Overhead Rate= $1960000/98000=$20

2. Computation of Total Cost as on March
Job	134	158	212	287	301	Total
Direct material	$4,000	$2,700	$86,200	$71,600	$18,860	$1,83,360
Direct labour	$8,300	$12,150	$36,100	$31,850	$21,880	$1,10,280
Overhead applied	$3,000	$7,400	$68,000	$55,800	$29,000	$1,63,200
Beginning Balance	$1,18,400	$1,21,400	$21,900	$34,400	$0	$2,96,100
Total	$1,33,700	$1,43,650	$2,12,200	$1,93,650	$69,740	$7,52,940

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Transcribed Image Text

In: AccountingSunland Company produces high-quality microscopes for educationand health care uses. The company uses a job...Sunland Company produces high-quality microscopes for educationand health care uses. The company uses a job order costing system.Because the microscopes’ optics require significant manual labor toensure adherence to strict manufacturing specifications, thecompany applies overhead on the basis of direct labor hours. At thebeginning of 2017, the company estimated its manufacturing overheadwould be $1,960,000 and that employees would work a total of 98,000direct labor hours. During March, the company worked on thefollowing five jobs:JobBeginningBalanceDirect Materialsadded duringMarchDirect Laboradded duringMarchDirect Labor Hoursadded duringMarch134$118,400$4,000$8,300150158121,4002,70012,15037021221,90086,20036,1003,40028734,40071,60031,8502,79030118,86021,8801,450Total$296,100$183,360$110,2808,160Jobs 134 and 158 were started in January, Jobs 212 and 287 werestarted in February, and Job 301 was started in March. DuringMarch, workers completed Jobs 134, 158, and 212. Jobs 134 and 212were delivered to customers during March.Actual overhead for the month of March was $177,000. Themanufacturing overhead account is disposed of annually, notmonthly.1. Calculate the total manufacturing cost for March.2. Calculate the total cost for each of the five jobs as ofMarch 31.

Job	Beginning Balance	Direct Materials added during March	Direct Labor added during March	Direct Labor Hours added during March
134	$118,400	$4,000	$8,300	150
158	121,400	2,700	12,150	370
212	21,900	86,200	36,100	3,400
287	34,400	71,600	31,850	2,790
301		18,860	21,880	1,450
Total	$296,100	$183,360	$110,280	8,160