Elite Home Decor manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labor-intensive production process, so it assigns manufacturing overhead based on direct labor cost. Elite expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labor costs of $3,150,000 during 2020. At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000 The following events occurred during January - March 2020. i) Purchased materials on account, $392,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labor in manufacturing Direct Materials Direct Labor Job 551 $70,200 $61,200 Job 552 97,500 115,600 Job 553 105,300 78,200 Job 554 117,000 85,000
Elite Home Decor manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labor-intensive production process, so it assigns manufacturing overhead based on direct labor cost. Elite expects to incur $2,205,000 of
At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000
The following events occurred during January - March 2020.
i) Purchased materials on account, $392,000
ii) Incurred manufacturing wages of $400,000
iii) Requisitioned direct materials and used direct labor in manufacturing
|
|
Direct Materials |
Direct Labor |
|
Job 551 |
$70,200 |
$61,200 |
|
Job 552 |
97,500 |
115,600 |
|
Job 553 |
105,300 |
78,200 |
|
Job 554 |
117,000 |
85,000 |
v) Issued indirect materials to production, $30,000
v) Charged indirect manufacturing wages to production, $60,000
vi)
vii) Other manufacturing overhead costs incurred on units 551 to 554 amounted to $49,000
viii)Allocated overheads to jobs at the predetermined rate
ix) Units completed: 551, 552 & 554
x) Sold units 551 & 554 (billed customers at a margin of 33⅓% on sales)
Required:
(a)
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