xG Grand Company Uses A X.g Granite Company Uses Ax-GChegg Study I Guded S: 1667

Question

xG Grand Company Uses A X.g Granite Company Uses Ax-GChegg Study I Guded S: 1667 /Nieww Granite Company uses a job order cost system. The company 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 $940,000 and 16,000 hours respectively, for the year. 5. a. Determine the predetermined overhead rate for the year. b. In June, job #315 was completed. Materials costs on the job totaled $66,000 and labor costs totaled $41,400 at $18 per hour. Overhead was applied based on the rate you calculated in part a. What is the total cost of Job #3157 (Hint: You will need back into direct labor hours) C. Assuming that this Job #315 has 500units and the company marks it up 2090 to determine selling price. What is the cost per unit and what selling price will they use? d. At the end of the year, it was determined that the company worked 15,500 direct labor-hours for the year, and incurred $936,000 in actual manufacturing overhead costs. Determine the amount of under- or overapplied overhead for the year.

Explanation / Answer

a Predetermined overhead rate = 940000/16000= $58.75 per Direct labor hour b Direct labor hours worked = 41400/18= 2300 Direct materials 66000 Direct labor cost 41400 Overhead applied 135125 =2300*58.75 Total cost of Job 315 242525 c Cost per unit = 242525/500= $485.05 Selling price per unit = 485.05*1.20= $582.06 Selling price in total = 582.06*500= $291030 d Overhead applied = 15500*58.75= $910625 Under-applied overhead = 936000-910625 = $25375

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