Essay About Cost Of Direct Material And Job-Order

Compufurn – Coursework – Najla Masthura
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Job-order costing system is appropriate for a company with job-shop operations or batch-production operations. In a job-shop environment, products are manufactured in very low volumes or one at a time. In a batch production environment, multiple products are produced in batches of relatively small quantity. In job-order costing system, cost of direct material, direct labor, and manufacturing overhead are assigned to each production job.The job which includes in CompuFurn’s work-in-process inventory on Dec, 31 is only the job PS812. The cost of job PS812 is calculated as follows:Job PS812 balance Nov, 31        $250,000December additions:         Direct material        $124,000        Purchased parts87,000        Direct labor200,500        Manufacturing overhead (19,500 machine hours x $5)    97,500 509,000Work-in-process inventory Dec, 31$759,000Manufacturing Overhead Rate = [pic 1][pic 2] = $5 per machine hourThe cost of the chair in CompuFurn Inc’s Finished-Goods Inventory in December 31Unit of Chair’s finished-goods inventory in December 31Finished-Goods in November 31                19.400(add) Complete in December15.000[pic 3]Available Finished-Goods                34.400(deduct) Ship in December 31        21.000[pic 4]Finished-Goods Inventory in December 31 (unit)        13.400

Because of CompuFurn Inc. use FIFO inventory method all units finished in December,        Unit cost of chairs completed in December :Work in process inventory, November 30                                $431.000December  additions:          Direct Material                $3.000          Purchase parts        $10.800          Direct Labor        $43.800          Manufacturing Overhead (4.400 hour x $5)$22.000[pic 5]                  $79.000[pic 6]Total Cost                     $510.000Unit Cost = [pic 7][pic 8] = [pic 9][pic 10]= $34 per unitCost of Finished Good Inventory := Unit Cost x Finished Goods Inventory  = $34 x 13.400 =$455.600CompuFurn Inc.’s overlapplied or underapplied overhead for the year with actual manufacturing overhead incurred in December amounted to $252.000.Machine hours usedJanuary – November                830.000December 49.900[pic 11]      Total (hour)        879.900Applied manufacturing overhead = 879.900 hours x $5 = $4.399.500Actual Manufacturing Overhead:January – November                $4.140.000December $    252.000[pic 12]      Total        $4.392.000Overapplied Overhead = applied overhead – actual overhead                                      = $4.399.500 – $4.392.000                                      = $7.500

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(2015, 09). Compufurn. EssaysForStudent.com. Retrieved 09, 2015, from
“Compufurn” EssaysForStudent.com. 09 2015. 2015. 09 2015 < "Compufurn." EssaysForStudent.com. EssaysForStudent.com, 09 2015. Web. 09 2015. < "Compufurn." EssaysForStudent.com. 09, 2015. Accessed 09, 2015. Essay Preview By: Najla Masthura Submitted: September 21, 2015 Essay Length: 963 Words / 4 Pages Paper type: Coursework Views: 280 Report this essay Tweet Get Access to 89,000+ Essays and Term Papers Join 209,000+ Other Students High Quality Essays and Documents Sign up © 2008–2020 EssaysForStudent.comFree Essays, Book Reports, Term Papers and Research Papers Essays Sign up Sign in Contact us Site Map Privacy Policy Terms of Service Facebook Twitter