Pearson Ltd. uses a normal job-costing system and applies overhead on the basis of direct labour-hours. At the beginning of the year, the company estimated that total overhead costs for the year would be $180,000, and it budgeted total labour-hours of 15,000. Actual labour-hours worked for the period January 1 to November 30 were 13,750.

On December 1, the company had three jobs in process:

During the month of December the following costs were incurred by job:

In addition, the company incurred the following costs during the month of December (these costs have not yet been recorded in the books):
DM purchases...........$7,800
Advertising expense.........$5,200
Plant amortization......... 2,490
Factory repairs and maintenance .... 1,500
Factory utilities........ 1,800
Factory supplies........ 1,800
Production supervisor salary..... 2,200
Sales personnel salaries..... 9,700
Administrative salaries....... 3,450
Interest expense......... 1,400
ADDITIONAL INFORMATION
1. The balance in the Overhead Control account on December 1 was $195,010.
2. There were no jobs in Finished Goods as of December 1.
3. Jobs # 815, 822, 823, and 824 were completed during December.
4. Job 824 is the only job in Finished Goods as of December 31.
5. The company€™s pricing policy is 200% of total manufacturing cost.
REQUIRED
1. Calculate the budgeted overhead rate used by Pearson.
2. Calculate the unit cost of ending work-in-process inventory assuming that the number of units in the job(s) total 250 units.
3. Calculate the cost of goods manufactured and the unadjusted gross margin for the month of December.
4. Calculate the amount of overallocated or underallocated overhead for the year.

Work-in-Process at December 1 Job Number 815 817 822 Direct Materials (DM) Direct Labour (DL) Overhead (OH) Total $1,400 $1,200 S 600 $3,200 $2,500 $2,400 $1,350 $6,250 $1,700 S 600 S 450 $2,750 Job # DM DL DL hours 815 817 822 823 824 $500 S900 50 hours 700 $1,440 80 hours $1,300 S3,060 $1,250 $3,960 $1,500 $5,940 170 hours 220 hours 330 hours