Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined
Question:
The expected volume is 180,000 direct labor-hours for the entire year. The following information is for March, when Jobs 6023 and 6024 were completed.
Required
Answer the following questions.
a. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year.
(Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $9 per direct labor-hour. Use this amount in answering requirements [b] through [e].)
b. Compute the total cost of Job 6023 when it is finished.
c. How much of factory overhead cost was applied to Job 6025 during March?
d. What total amount of overhead was applied to jobs during March?
e. Compute actual factory overhead incurred during March.
f. At the end of the year, Kansas Company had the following account balances:
Overapplied Overhead . . . . . . . . . . . . $ 3,000
Cost of Goods Sold . . . . . . . . . . . . . . 2,940,000
Work-in-Process Inventory . . . . . . . . . 114,000
Finished Goods Inventory . . . . . . . . . 246,000
How would you recommend treating the overapplied overhead, assuming that it is not material? Show the new account balances in the following table.
Overapplied Overhead . . . . . . . . . . _________
Cost of Goods Sold . . . . . . . . . . . . . _________
Work-in-Process Inventory . . . . . . . . _________
Finished Goods Inventory . . . . . . . . _________
Step by Step Answer:
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher