19) M Corporation b Data for the most recently completed year appear below s its

Question

19) M Corporation b Data for the most recently completed year appear below s its predetermined overhead rate on the estimated labor-hours for the upcoming year Estimates made at the beginning of the year: Estimated labor-hours Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead Actual labor-hours for the year Actual OH for the year 3,000 S 3.25 per labor-hour 70,000 3,200 S 85,220 Compute the company's predetermined overhead rate for the recently completed year. Calculate the amount of OHad that would be applied to jobs for the recently completed year Was the overhead over or under applied and by what amount? Job 243 was recently completed. The following data have been recorded on its job cost sheet: s 4,800 Direct materials Direct labor-hours Direct labor wage rate Machine-hours Number of units completed 400labor-hours 10per labor-hour 460machine-hours S 200units The company applies manufacturing overhead is $12 per machine-hour. on the basis of machine-hours. The predetermined overhead rate product cost that would appear on the job cost shet for this job, cost that would appear on the job cost sheet for this job.

Explanation / Answer

19) Predetermine overhead rate = (70000/3000)+3.25 = $26.5833 per labour hour

Overhead applied = 26.5833*3200 = $85067

Under applied overhead = 85067-85220 = $153

20) Total product cost on job cost sheet

Unit product cost = 14320/200 = 71.60 per unit

Direct material 4800 Direct labour (400*10) 4000 Applied overhead (460*12) 5520 Total product cost of job 14320

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