Duke Company is a furniture manufacturer. At the end of

Duke Company is a furniture manufacturer. At the end of November two jobs are in work-in-process. The following table provides the information about Jobs 401 and 402.

Job 401

Job 402

Direct labor

$20,000

$25,000

Direct materials

$ 35,000

$ 20,000

Direct labor hours

2,000

2,500

Machine hours

1,500

3,000

The predetermined overhead rate for Duke is based on budgeted direct labor hours, 100,000, and the budgeted overhead cost, $750,000. The actual data for November are:

Direct Labor Hours

15,000

Overhead

$95,500

Finished Goods Inventory

$60,000

Cost of Goods Sold

$400,000

There is no beginning inventory. Duke prorates overhead variance to FG, WIP, COGS based on total costs in these accounts.

(a) Determine the predetermined overhead application rate and the cost of WIP before overhead variance proration.

(b) Determine the overhead variance and prorate the variance to WIP, FG, and COGS.

Thomson Company manufactures mosquito repellant. There are multiple processing departments. The following information comes from the first processing department:

Beginning WIP

None

Units started in November

40,000

Units completed and transferred out

36,000

Ending work in process (units)

4,000 (60% complete for conversion)

Conversion cost incurred in November

$ 19,200

Material cost incurred in November

(raw material is added in the beginning of the process)

$16,000

Determine the cost of goods transferred out and the cost of ending inventory of WIP for November.

 

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