At the beginning of the year, Dillon Company budgeted overhead of $180,000 as well as 15,000...
At the beginning of the year, Dillon Company budgeted overhead of $180,000 as well as 15,000 direct labour hours. During the year, Job K456 was completed with the following information: direct materials cost, $2,340; direct labour cost, $3,600. The average wage for Dillon Company employees is $10 per hour.
By the end of the year, 15,400 direct labour hours had actually been worked, and Dillon Company incurred the following actual overhead costs for the year:
Equipment lease $ 5,000
Depreciation on building 20,000
Indirect labour 100,000
Utilities 15,000
Other overhead 45,000
Required:
- Calculate the overhead rate for the year.
- Calculate the total cost of Job K456.
- Prepare the journal entries to record actual overhead and to apply overhead to production for the year.
- Is overhead overapplied or underapplied? By how much?
- Assuming that the normal cost of goods sold for the year is $700,000, what is the adjusted cost of goods sold?
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