Kody Corporation uses a job-order costing system with a plantwide overhead rate

Question

Kody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Compute the predetermined overhead rate. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

During the year Job 500 was started and completed. The following information was available with respect to this job:

Compute the total manufacturing cost assigned to Job 500. (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

During the year the company worked a total of 145,100 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,334,567. What is the amount of underapplied or overapplied overhead for the year? (Input the amount as a positive value. Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

If this amount were closed out entirely to cost of goods sold, would the journal entry increase or decrease net operating income?

Machine-hours required to support estimated production 154,000 Fixed manufacturing overhead cost $ 658,000 Variable manufacturing overhead cost per machine-hour $ 4.90

Explanation / Answer

POR= $659,000+ ($4.30 X 152,000) / 152000= $8.64 per machine hour

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