Parker Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at RM50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled RM4,000 and labor costs totaled RM1,500 at RM5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred RM54,000 in actual manufacturing overhead costs. REQUIRED: If Job #461 contained 100 units, compute the unit cost on the completed job cost sheet. Determine whether manufacturing overhead costs was under/over-applied for the year.
Parker Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at RM50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled RM4,000 and labor costs totaled RM1,500 at RM5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred RM54,000 in actual manufacturing overhead costs. REQUIRED: If Job #461 contained 100 units, compute the unit cost on the completed job cost sheet. Determine whether manufacturing overhead costs was under/over-applied for the year.
Parker Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at RM50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled RM4,000 and labor costs totaled RM1,500 at RM5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred RM54,000 in actual manufacturing overhead costs. REQUIRED: If Job #461 contained 100 units, compute the unit cost on the completed job cost sheet. Determine whether manufacturing overhead costs was under/over-applied for the year.
Parker Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at RM50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled RM4,000 and labor costs totaled RM1,500 at RM5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred RM54,000 in actual manufacturing overhead costs.
REQUIRED:
If Job #461 contained 100 units, compute the unit cost on the completed job cost sheet.
Determine whether manufacturing overhead costs was under/over-applied for the year.
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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