Need help with accounting problem!? Insides, an interior decorating firm, uses a

Question

Need help with accounting problem!?
Insides, an interior decorating firm, uses a job order costing system and applies overhead to jobs using a predetermined rate of $17 per direct labor hour. On June 1, 2010, Job #918 was the only job in process. Its costs included direct material of $8,250 and direct labor of $500 (25 hours at $20 per hour). During June, the company began work on Jobs #919, #920, and #921. Direct material used for June totaled $21,650. June's direct labor cost totaled $6,300. Job #920 had not been completed at the end of June, and its direct material and direct labor charges were $2,850 and $800, respectively. All other jobs were completed in June.

a. What was the total cost of Job #920 as of the end of June 2010?
$

b. What was the cost of goods manufactured for June 2010?
$

c. If actual overhead for June was $5,054, was the overhead underapplied or overapplied for the month? By how much?

Explanation / Answer

a. Total cost of Job #920 = DM + DL + OH = 2,850 + 800 + (800/20) x 17 --> DLH = 800/20 = 4,330 b. Cost of goods manufactured = DM + DL + OH incurred in June = 21,650 + 6,300 + (6,300/20) x 17 = 33,305 c. Applied overhead = (6,300/20) x 17 = 5,355 Actual overhead = 5,054 Over-applied overhead = 5,355 - 5,054 = 301

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