Problem 20-4A Agassi Company Uses A Job Order Cost System In Each Of Its Three Manufacturing Departments.

Problem 20-4A

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K.
In establishing the predetermined overhead rates for 2017, the following estimates were made for the year.

 

Department

 

D

E

K

 

Manufacturing   overhead

$1,200,000

$1,500,000

$900,000

 

Direct   labor costs

$1,500,000

$1,250,000

$450,000

 

Direct   labor hours

100,000

125,000

40,000

 

Machine   hours

400,000

500,000

120,000

During January, the job cost sheets showed the following costs and production data.

 

Department

 

D

E

K

 

Direct   materials used

$140,000

$126,000

$78,000

 

Direct   labor costs

$120,000

$110,000

$37,500

 

Manufacturing   overhead incurred

$99,000

$124,000

$79,000

 

Direct   labor hours

8,000

11,000

3,500

 

Machine   hours

34,000

45,000

10,400