Dina Corp. uses a job order cost accounting system. Four jobs were started during the current year. The following is a record of the costs incurred:

Actual overhead costs were $55,800. The predetermined overhead allocation rate is $2.40 per direct labor hour. During the year, Jobs 1010, 1012, and 1013 were completed. Also, Jobs 1010 and 1013 were sold for $387,000. Assuming that this is Dina's first year of operations:
(a) Calculate the balance in the Goods in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts.
(b) Does the Factory Overhead account balance indicate an over- or underapplication of overhead? Prepare the entry to close this out assuming the amount is not material.

Question

Dina Corp. uses a job order cost accounting system. Four jobs were started during the current year. The following is a record of the costs incurred:

Actual overhead costs were $55,800. The predetermined overhead allocation rate is $2.40 per direct labor hour. During the year, Jobs 1010, 1012, and 1013 were completed. Also, Jobs 1010 and 1013 were sold for $387,000. Assuming that this is Dina's first year of operations:
(a) Calculate the balance in the Goods in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts.
(b) Does the Factory Overhead account balance indicate an over- or underapplication of overhead? Prepare the entry to close this out assuming the amount is not material.

Quizplus · Accepted Answer

The Answer of Dina Corp. uses a job order cost accounting system. Four jobs were started during the current year. The following is a record of the costs incurred:

Actual overhead costs were $55,800. The predetermined overhead allocation rate is $2.40 per direct labor hour. During the year, Jobs 1010, 1012, and 1013 were completed. Also, Jobs 1010 and 1013 were sold for $387,000. Assuming that this is Dina's first year of operations:
(a) Calculate the balance in the Goods in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts.
(b) Does the Factory Overhead account balance indicate an over- or underapplication of overhead? Prepare the entry to close this out assuming the amount is not material.

Dina Corp Uses a Job Order Cost Accounting System