Question

Moor Company uses a job-order costing system and applies overhead costs
to jobs at a rate of 120% of direct labor cost. Moor Company started the
month of June with three jobs in process. The cost of beginning work in
process plus the costs added during June are shown below:

                                  Job #1-A      Job #3-G      Job #7-L
beginning work in process .....    $3,250        $2,690        $3,720

COSTS ADDED DURING JUNE:
direct materials ..............    $4,680        $3,950        $2,870
direct labor ..................     3,530         4,180         2,410

During June, Moor Company completed and sold Job #1-A. Job #3-G was
also completed but was not sold by the end of June. Job #7-L was not
completed by the end of June. Moor Company's cost of goods sold for
June after the overhead variance was closed totaled $16,290.

Calculate Moor Company's actual overhead cost for the month of June.

Answer 1

Overhead applied during June:
Direct labor costs during June ($3530 + $4180 + $2410)	10120
x Overhead rate	120%
Overhead applied during June $	12144
Cost of goods sold:	Job #1-A
Beginning work in process	3250
Direct materials	4680
Direct labor	3530
Overhead (120% x $3530)	4236
Cost of goods sold $	15696
Overhead variance (under-applied)	594
Adjusted cost of goods sold $	16290

Actual overhead cost = Overhead applied + Under-applied overhead = $12144 + $594 = $12738

Actual overhead cost for the month of June: $12,738