QUESTION 12 Parker Company uses a job-order costing system and applies manufactu

Question

QUESTION 12 Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on diredt labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at 550,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled $4,000, and labor costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 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 underallocated or overal located overhead for the year

Explanation / Answer

predetermined overhead rate estimated MOH/estimated direct labor hours 50,000/20,000 2.5 per direct labor hour a) Material cost 4,000 labor cost (1500*5) 7500 overhead applied (24000*2.5)= 60000 total manufacturing cost 71,500 unit product cost = 71500/100 715 per unit answer b) overhead applied 60,000 Actual manufacturing overhead 54,000 overhead over allocated 6,000 answer

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