Question & Answer: Product Costing and Accounting for Factory Overhead (aka Manufacturing Overhead) Humming Company is a relatively small m…..

Product Costing and Accounting for Factory Overhead (aka Manufacturing Overhead) Humming Company is a relatively small manufacturer of high quality musical instruments for professional musicians. Prior to the onset of the year, the company estimated that it would incur $120,000 in Factory Overhead costs and 8,000 Direct Labor hours for the entire year. The April l balances in the inventory accounts follow: Direct& Indirect Materials Inventory $27.000 Work-in-Process inventory (S10) Finished goods inventory (J21) 54,000 Note that Job S10 was the only job in process on April 1. The following select transactions occurred during the month of April: a. Purchased Direct and Indirect Materials totaling $90,000. b. Issued $91,000 of materials to production, $4,000 of which was for Indirect Materials. The cost of the Direct Materials issued by job, follows Job S10 $23.000 Job C20 Job M54 Indirect Materials 42,000 22,000 4,000 c. Incurred payroll cost of $20,460 as follows: S6,110 4,030 1,820 2.500 Selling and Administrative salaries 6.000 Direct Labor Cost (513/hour: total 920 hours) Job S10 (470 hours) Job C20 (310 hours Job M54 (140 hours) Indirect labor d. Recognized depreciation for the month as follows: Factory assets Selling and administrative assets e. Incurred advertising expenses of $6,000. $2,200 1.700 f Incurred factory utilities costs of $1,300. g. Incurred other Factory Overhead costs of $5,000. h. Applied Factory Overhead to production on the basis of Direct Labor hours.