Greenlaw Products uses job order costing and applies overhead to products using direct labour hours.Greenlaw has determined that their predetermined overhead is $4.00 per direct labour hour when an estimated 200 000 direct labour hours are incurred.
During 2009 Greenlaw actually incurred a total of 215 000 direct labour hours and actual overhead costs ended up being $900 000.
Greenlaw has no ending work-in-process or finished goods inventories.
Required:
A. What were Greenlaw's estimated total overhead costs for the year?
B. By how much was overhead over or under-applied?
C. Assuming that cost of goods sold was $ \$ 3000000 $ prior to the adjustment for over- or underapplied overhead, what will be the cost of goods sold amount after the year-end adjustment?

Question

Greenlaw Products uses job order costing and applies overhead to products using direct labour hours.Greenlaw has determined that their predetermined overhead is $4.00 per direct labour hour when an estimated 200 000 direct labour hours are incurred.
During 2009 Greenlaw actually incurred a total of 215 000 direct labour hours and actual overhead costs ended up being $900 000.
Greenlaw has no ending work-in-process or finished goods inventories.
Required:
 A. What were Greenlaw's estimated total overhead costs for the year?
B. By how much was overhead over or under-applied?
C. Assuming that cost of goods sold was $ \$ 3000000 $ prior to the adjustment for over- or underapplied overhead, what will be the cost of goods sold amount after the year-end adjustment?

Quizplus · Accepted Answer

The Answer of Greenlaw Products uses job order costing and applies overhead to products using direct labour hours.Greenlaw has determined that their predetermined overhead is $4.00 per direct labour hour when an estimated 200 000 direct labour hours are incurred.
During 2009 Greenlaw actually incurred a total of 215 000 direct labour hours and actual overhead costs ended up being $900 000.
Greenlaw has no ending work-in-process or finished goods inventories.
Required:
 A. What were Greenlaw's estimated total overhead costs for the year?
B. By how much was overhead over or under-applied?
C. Assuming that cost of goods sold was $ \$ 3000000 $ prior to the adjustment for over- or underapplied overhead, what will be the cost of goods sold amount after the year-end adjustment?

Greenlaw Products Uses Job Order Costing and Applies Overhead to Products