Question

Parker Corporation uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at $73,440 and 27,200 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled $4,200 and labor costs totaled $1,664 at $5.20 per hour. At the end of the year, it was determined that the company worked 35,900 direct labor-hours for the year and incurred $89,430 in actual manufacturing overhead costs.

Required:

a. Job #461 contained 100 units. Determine the unit product cost that would appear on the job cost sheet.

b. Determine the underapplied or overapplied overhead for the year.

Noreen 4e Recheck 2017-16-03

Answer 1

Given that To calculate product cott we need manufacture overhead applied to the product for this we have to calculate predeteamined over head rate. paedetermined Overhead aate: Estimated Estimated mfg overhead direct labor hony $ 73,440 27 200 $ 9.7 pea direct labor hour a Total cost of Job #461 I material cost $4,200 Taboa com $16 64 mfg Overhead' + 864 Total cost of 100 unit ¥6428 waaring notes.. Mfg overhead - predetermined vratex Direct laber. houy Direct labour hour : 2.7x320 , : 864 total labour cont Tabour cost pronour 1664320 . 5.20 .

Unit product : Total cost of 100 unit 100 unity : 6728 100 e : $67.28 Budgeted manufacturing Overhead Pate a Budgeted manufacturing Overhead costs Budgeted disect laban howy 73 yuo 27,200 9.7 pea direct labom houza The manufacturing overhead allocate de Actual direct lobur houny x budgeted manufacturing overhead rate = 35,900 x 2.7 = $916,930 Actual manufacturing overhead cont 2:$89,430 Hence manufacturing' overhead Couty Overapplied z manufacturing) overhead allocated - Actual manufactulo) .: $96,938:-$89,430 = $7500 oves applied. . Overhead costs