At the beginning of the accounting period, the accountant for ABC Industries estimated that total overhead would
Question:
At the beginning of the accounting period, the accountant for ABC Industries estimated that total overhead would be $80,000. Overhead is allocated to jobs on the basis of direct labor cost. Direct labor was budgeted to cost $200,000 this period. During the period only three jobs were worked on. The following summarizes the direct materials and labor costs for each:
Job 1231 was finished and sold; job 1232 was finished but is waiting to be sold; and job 1233 is still in process. Actual overhead for the period was $82,000.
A. Calculate the cost of each job completed.
B. Calculate the cost of goods sold.
C. Calculate the amount of over-applied or under-applied overhead that will be prorated to the ending balances in work-in-process, finished goods, and cost of goodssold.
Step by Step Answer:
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott