Parker Company uses a job order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labour-hours.Last year manufacturing overhead and direct labour-hours were estimated at $50,000 and 20,000 hours,respectively,for the year.In June,Job #461 was completed.Materials costs on the job totalled $4,000 and labour costs totalled $1,500 at $5 per hour.At the end of the year,it was determined that the company worked 24,000 direct labour hours for the year and incurred $54,000 in actual manufacturing overhead costs.
Required:
a.Job #461 contained 100 units.What unit cost that would appear on the job cost sheet?
b.What is the underapplied or overapplied overhead for the year?

Question

Quizplus · Accepted Answer

The Answer of Parker Company uses a job order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labour-hours.Last year manufacturing overhead and direct labour-hours were estimated at $50,000 and 20,000 hours,respectively,for the year.In June,Job #461 was completed.Materials costs on the job totalled $4,000 and labour costs totalled $1,500 at $5 per hour.At the end of the year,it was determined that the company worked 24,000 direct labour hours for the year and incurred $54,000 in actual manufacturing overhead costs.
Required:
a.Job #461 contained 100 units.What unit cost that would appear on the job cost sheet?
b.What is the underapplied or overapplied overhead for the year?

Parker Company Uses a Job Order Cost System and Applies