Aspen Company estimates its manufacturing overhead to be $1,271,000 and its direct labor costs to be $620,000
Question:
Aspen Company estimates its manufacturing overhead to be $1,271,000 and its direct labor costs to be $620,000 for year 2.Aspen worked on three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $184,000. Job 2-2,which was completed, but not sold at the end of the year, had actual direct labor costs of $309,000. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of$134,000. Actual manufacturing overhead for year 2 was $1,200,000.Manufacturing overhead is applied on the basis of direct labor costs.
Required:
a. How much overhead was applied to each job in year 2?
b. What was the over- or underapplied manufacturing overhead for year 2?
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher