At the beginning of the year, Dillon Company budgeted overhead of $180,000 as well as 15,000 direct

Question:

At the beginning of the year, Dillon Company budgeted overhead of $180,000 as well as 15,000 direct labour hours. During the year, Job K456 was completed with the following information: direct materials cost, $2,340; direct labour cost, $3,600. The average wage for Dillon Company employees is $10 per hour.

By the end of the year, 15,400 direct labour hours had actually been worked, and Dillon Company incurred the following actual overhead costs for the year:

Equipment lease......................................$5,000

Depreciation on building...........................20,000

Indirect labour......................................100,000

Utilities................................................15,000

Other overhead......................................45,000

Required:

1. Calculate the overhead rate for the year.

2. Calculate the total cost of Job K456.

3. Prepare the journal entries to record actual overhead and to apply overhead to production for the year.

4. Is overhead overapplied or underapplied? By how much?

5. Assuming that the normal cost of goods sold for the year is $700,000, what is the adjusted cost of goods sold?


Fantastic news! We've located the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Cornerstones of Managerial Accounting

ISBN: 978-0176530884

2nd Canadian edition

Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman

Question Posted: