Question

Required information [The following information applies to the questions displayed below.] Garcia, Inc. uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities. The company applies manufacturing overhead using machine hours in the Machining Department and direct-labor cost in the Assembly Department. The following information relates to the year just ended: Machining Assembly Department Department Budgeted manufacturing overhed $4,000,000 $3,136,000 Actual manufacturing overhead 4,260,000 3,040,000 Budgeted direct-labor cost (based on practical capacity) 1,500,000 5,600,000 Actual direct-labor cost 1,450,000 5,780,000 Budgeted machine hours (based on practical capacity) 400,000 100,000 Actual machine hours 425,000 110,000 The data that follow pertain to job no. 775, the only job in production at year-end. Direct material Direct labor Machine hours Machining Assembly Department Department $23,500 $ 6,600 $27,800 $58,700 370 150 Selling and administrative expense amounted to $2,500,000.

Answer 1

1)				Predetermined overhead rate
	Machining department			10	per machine hour
	Assembly department			56%	% of direct-labor cost
2)	Total cost			153,172
				Machining	Assembly
	Direct materials			23,500	6,600
	Direct labor			27,800	58,700
	overhead applied			3700	32872
	total cost			55,000	98,172	153,172
3)	Actual manufacturing overhead				4,260,000
	overhead applied				4,250,000
	overhead underapplied by				10,000	answer
4)	overhead applied				3,236,800
	Actual manufacturing overhead				3,040,000
	overhead overapplied by				196,800	amswer
6)	Work-in -process				36572