Question

Job Costing #3 Burlington Corporation uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $3,200,000 and 4,000 machine hours would be used. Labor was estimated at $200/hour. The following information pertains to December of the current year: Job No. Job No. Job No. Job No. 206 207 208 209 Work in process, December 1 $28,000 $30,000 $22,000 $10,000 December production activity: $4,000 $5,000 $6,000 $2,000 50 700 900 100 Materials requisitioned Direct labor hours 250 1500 300 200 Machine hours On December 15 Jobs 206 and 207 were completed and the clients were billed at cost plus 50%. All otherjobs remain in process. In December selling expenses were $1,500 and administrative expenses $2,000. Required: Compute the predetermined overhead application rate. Determine the total cost associated with each job. c. Calculate the balance of the Work In Process at the end of December. d. What is the selling price of the jobs? e. Prepare an Income Statement for December. f. What would happen if the company determined that the actual a. b. manufacturing overhead for the year relating to sales was $3,300,000?

Answer 1

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