h care uses. The company uses a job order costing system. Because the m signific

Question

h care uses. The company uses a job order costing system. Because the m significant manual labor to ensure adherence to strict manufacturing lolowiny lhei moted afacturing overhead would be s1,980,000 and that employes croscopes' optics require specifications, the company applies overhead on the basis of direct labor hours. At the beginning of 2017 , the ld be $1,980,000 and that employees would work a total of 99,000 direct labor hours. During March, the company worked on the five jobs. Direct Materials Direct Labor Direct Labor Hours Beginning added during added during added during Job Balance March March March 134 212 287 301 Total $118,800 121,550 21,800 34,250 $4,000 2,600 86,300 71,900 18,900 $183,700 12,190 37,000 31,870 21,880 $111,540 140 310 3,400 2,700 1,430 $296,400 134, 158, and 212 Jobs 134 and 158 were started in January, Jobs 212 and 287 were started in February, and Job 301 was started in March. During March, workers complet Jobs 134 and 212 were delivered to customers during March. Crane Company incurred $177,000 manufacturing overhead in the month of March. Given that expenditure for overhead, was manufacturing overhead under- or overapplied in March? By how much? Over/Underapplied OH $ Assume that Crane Company closes under- or overapplied overhead to the Cost of Goods Sold account. Calculate the Cost of Goods Sold amount after that adjustment

Explanation / Answer

1 Manufacturing overheads estimated 1980000 Direct labor hours estimated 99000 Predetermined overhead rate 20 Direct labor hours during the year 7980 Predetermined overhead rate 20 Manufacturing overheads applied 159600 Manufacturing overheads incurred 177000 Under applied 17400 2 Jobs 134 158 212 287 301 Beginning balance 118800 121550 21800 34250 Added during month Direct material 4000 2600 86300 71900 18900 Direct labor 8600 12190 37000 31870 21880 Overheads applied (hours * rate) 2800 6200 68000 54000 28600 Total cost 134200 142540 213100 192020 69380 Jobs sold Job 134 134200 Job 212 213100 Unadjusted cost of goods sold 347300 Underapplied 17400 Adjusted cost of goods sold 364700 3 Allocation Underapplied Adjusted balance Work in progress 82600 9005 91605 Finished goods 6200 675 6875 Cost of goods sold 70800 7720 78520 159600 17400 177000 4 Job 212 Total cost 213100 No. of microscopes 1000 Unit cost 213.1 No

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