Question

1.   The Dewey Company uses a predetermined overhead rate to apply manufacturing overhead to production. The rate is based on direct labor hours. Estimates for the year just ended are as follows:

Estimated manufacturing overhead	$300,000
Estimated direct labor hours	60,000

During the year Dewey Company used 37,000 direct labor hours.

At the end of the year, Dewey Company records revealed the following information:

Raw materials inventory	$ 35,000
Work-in-process inventory	60,000
Finished goods inventory	105,000
Cost of goods sold	400,000
Manufacturing overhead costs incurred	200,000

Required:

a.	Calculate the predetermined overhead rate for the year.
b.	Determine the amount of overhead applied during the year.
c.	Determine the amount of underapplied or overapplied manufacturing overhead for the year.

2. The Huyden Company builds equipment to customer's specifications. On March 1, two jobs were in process with the following costs and information:

	Job 43	Job 44
Direct materials	$10,200	$34,400
Direct labor	21,000	10,400
Applied overhead*	4,950	7,370
Total cost	$36,150	$52,170
Machine hours	45	67

*Applied on the basis of machine-hours

During March, Job 45 was started and Job 44 was completed and delivered to the customer. Job 43 was missing a part that was back ordered and will be completed in June. The following costs were incurred in March:

	Job 43	Job 44	Job 45
Direct materials	$2,300	$4,500	$12,700
Direct labor	$2,400	$3,300	$4,500
Machine hours	21	11	23

It is Huyden's policy to bill clients at cost plus 40 percent.

Required:

a.	Calculate the overhead rate that Huyden is using.
b.	Calculate the overhead applied to each job during the month of March and complete the Job Cost Report for the Month of March.
c.	Calculate the balance in work in process on March 31.
d.	What was the price of Job 44?

Answer 1

Solution, Given data, Estimated manufacturing over heed Estimated direct labor hours $300000 60000 Raw materials inventory $ 35000 works in-process inventory 60000 Finished goods inventory 105000 Lesst of goods sold 400000 Manufacturing overhead ceste incurred 200000. @) predetermined overhead rate for the year = 300 6D bo 000 =&slur (b) amount of overhand applied during the yer = $x 3700 $185000 (6) Amount of over tracted applied manufacturing overhead for the year = 185000 - 200000 = 15000).

Given data, 1 Jobu3 Ewveet abaterials 2.699.00 Direct din der $21000 Applica overhead u950 total cast $36 150 machine hours us | Jabuy 24460 $10400 7370 $ 52170 @) Oveshed. Rate = 4950 os 7370 67 -per machine hour. () Job us trob yul Job us materihl | 2300 | 4500 | 12700 labor 2you | 3300 / 4500 @ 101 236 12.10 2530 Total 700 golo 19730 -Add nor 2804 . 3604 1892 Tolol afl4 12,614 27622.

Since job 43 & us are in progress on march 31, so wil are the total cost of Job us Cous without including profit element. Job 43 = 36150 + 7010 43160 Job us = 19730. o the price of job luu is 12.614.