Granite Company uses a job-order costing system. The company applies manufacturi
ID: 2426536 • Letter: G
Question
Granite Company uses a job-order costing system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year, manufacturing overhead and direct labor-hours were estimated at $87,880 and 16,900 hours respectively, for the year. In June, job #315 was completed. Materials costs on the job totaled $1,500 and labor costs totaled $1,922 at $6.20 per hour. At the end of the year, it was determined that the company worked 16,100 direct labor-hours for the year, and incurred $86,920 in actual manufacturing overhead costs. Required: a. Determine the predetermined overhead rate for the year. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Overhead rate $ per DLH b. Determine the amount of overhead charged to jobs during the year. (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.) Overhead charge $ c. Determine the amount of underapplied or overapplied overhead for the year. (Input the amount as positive value. Omit the "$" sign in your response.) overhead $ d. Assuming that 100 units were completed, determine the unit cost that would appear on the job cost sheet for Job #315. (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.) Unit cost $
Explanation / Answer
a)
Predetermined overhead rate per hour:
= $87,880/16,900
= $5.20 per hour
b)
Overheads charged:
= 16,100 hours*$5.20
= $83,720
c)
Under applied overheads:
= $86,920-$83,720
= $3,200
d)
Job cost of 100 completed units:
= $1,500+$1,922+($1,922/$6.20)*$5.20
= $5,034
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