Plasencia Corporation is a manufacturer that uses job-order costing.The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.The company has supplied the following data for the just completed year: Results of operations: The net operating income is:
A)$1,318,000
B)$1,008,000
C)$728,000
D)$1,038,000

Question

Plasencia Corporation is a manufacturer that uses job-order costing.The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.The company has supplied the following data for the just completed year:  Results of operations:  The net operating income is:
A)$1,318,000 
B)$1,008,000 
C)$728,000 
D)$1,038,000

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base
= $635,500 ÷ 41,000 direct labor-hours = $15.50 per direct labor-hour
Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred
= $15.50 per direct labor-hour × 42,000 direct labor-hours = $651,000 11ea7998_5ef8_b95e_911b_43b4368a2c4b_TB2627_00_TB2627_00 11ea7998_5ef8_e06f_911b_e9354e879416_TB2627_00_TB2627_00 11ea7998_5ef9_0780_911b_090208fa18d8_TB2627_00_TB2627_00

Plasencia Corporation Is a Manufacturer That Uses Job-Order Costing