The Pacific Manufacturing Company operates a job-order costing system and applie

Question

The Pacific Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $120,400 of manufacturing overhead for an estimated allocation base of $86,000 direct labor dollars. The company has provided the following data:

Beginning Ending
Raw Materials $ 20,000 $ 11,000
Work in Process $ 49,000 $ 36,000
Finished Goods $ 72,000 $ 56,000

The following actual costs were incurred during the year:


Purchase of raw materials (all direct) $ 137,000
Direct labor cost $ 82,000
Manufacturing overhead costs:
Insurance, factory $ 9,200
Depreciation of equipment $ 19,000
Indirect labor $ 35,800
Property taxes $ 9,000
Maintenance $ 12,000
Rent, building $ 33,000



1-b.
Compute the amount of under-applied or over-applied overhead for the year. (Input the amount as a positive value. Omit the "$" sign in your response.)

overhead $


The Pacific Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $120,400 of manufacturing overhead for an estimated allocation base of $86,000 direct labor dollars. The company has provided the following data:

Beginning Ending
Raw Materials $ 20,000 $ 11,000
Work in Process $ 49,000 $ 36,000
Finished Goods $ 72,000 $ 56,000

The following actual costs were incurred during the year:


Purchase of raw materials (all direct) $ 137,000
Direct labor cost $ 82,000
Manufacturing overhead costs:
Insurance, factory $ 9,200
Depreciation of equipment $ 19,000
Indirect labor $ 35,800
Property taxes $ 9,000
Maintenance $ 12,000
Rent, building $ 33,000



1-b.
Compute the amount of under-applied or over-applied overhead for the year. (Input the amount as a positive value. Omit the "$" sign in your response.)

overhead $

Explanation / Answer

Use a spreadsheet

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