Company C financial records The company uses a job order cost system. The compan

Question

Company C financial records The company uses a job order cost system. The company applies manufacturing overhead to jobs based on a predetermined oh rate based on direct labor hours. Last year, the estimate was based on $ 95,000 for manufacturing overhead and 19,000 direct labor hours. In June a job was completed which cost $ 2,500 for materials $ 4,250 at $ 8.50 per hour for labor. At the end of the year it was determined the company actually worked 16,000 direct labor hours and had $ 83,000 in actual costs. 3) a) Determine the predetermined oh rate for the year. b) Determine the amount charged to the job completed in june c) Determine the over or underapplied oh for the year and give the journal entry d) Assume the job completed in June had 100 units, what is the cost per unit.

Explanation / Answer

a) Predetermine overhead rate = 95000/19000 = 5 per labour hour

b) Amount charged to the job completed in june = (4250/8.50*5)+2500+4250 = $9250

c) Applied overhead = 16000*5 = 80000

Acutal overhead = 83000

Under applied overhead = 83000-80000 = 3000

d) Cost per unit = 9250/100 = 92.5 per unit

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