Reference no: EM132351279
Question - Lawn EZY Ltd, which uses a job costing system, had two jobs in process at the start of the year: Job number G64 ($88,000) and Job number G65 ($55,500). The following information is available:
The company applies manufacturing overhead on the basis of machine hours. Budgeted overhead and machine activity for the year were anticipated to be $850,000 and 17,000 hours, respectively.
The company worked on four jobs during the first quarter (i.e. from 1 January to 31 March). Direct materials used, direct labour cost incurred and machine hours consumed were as shown in the following table.
|
Job Number
|
Direct Material
|
Direct Labour Cost
|
Machine hours
|
|
G64
|
$22,000
|
$35,000
|
1,200
|
|
G65
|
Nil
|
$23,000
|
700
|
|
G66
|
$45,000
|
$65,000
|
2,000
|
|
G67
|
$16,000
|
$10,800
|
500
|
Manufacturing overhead incurred during the first quarter included depreciation of $35,000, indirect labour of $61 ,000, indirect materials used of $50,000 and other factory costs of $140,000.
The company completed job number G64 and job number G65 during the first quarter, job number G65 was sold on credit, producing a profit of $34,700 for the firm.
Required: Show ALL your workings.
Calculate the company's applied manufacturing overhead and manufacturing overhead incurred during the first quarter.
Calculate the cost of the jobs completed as of 31 March: job number G64 and job number G65.
Calculated the sales revenue earned on the sale of job number G65.
Calculate the cost of the jobs still in production as of 31 March.
Did the cost of the finished goods inventory increase or decrease during the first quarter? Calculate the amount of increase/decrease.