Granite Company uses a job-order costing system. The company applies manufacturi

Question

Granite Company uses a job-order costing 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 $68,880 and 16,400 hours respectively, for the year. In June, job #315 was completed. Materials costs on the job totaled $1,400 and labor costs totaled $2,236 at $5.20 per hour. At the end of the year, it was determined that the company worked 15,900 direct labor-hours for the year, and incurred $70,180 in actual manufacturing overhead costs.

Determine the predetermined overhead rate for the year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Determine the amount of overhead charged to jobs during the year. (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Determine the amount of underapplied or overapplied overhead for the year. (Input the amount as positive value. Omit the "$" sign in your response.)

Assuming that 100 units were completed, determine the unit cost that would appear on the job cost sheet for Job #315. (Round your intermediate calculations and final answer to 2 decimal places.Omit the "$" sign in your response.)

Granite Company uses a job-order costing 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 $68,880 and 16,400 hours respectively, for the year. In June, job #315 was completed. Materials costs on the job totaled $1,400 and labor costs totaled $2,236 at $5.20 per hour. At the end of the year, it was determined that the company worked 15,900 direct labor-hours for the year, and incurred $70,180 in actual manufacturing overhead costs.

Explanation / Answer

Hi,

Please find the answer as follows:

Part A:

=68880/16400 = 4.2

Part B:

=15900*4.2 = 66780

Part C:

= 70180 - 66780 = 3400 (underapplied)

Part D:

=1400 + 2236 + 2236/5.2*4.2 = 5442/100 = 54.42

Thanks.

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