Exercise 2. Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company's estimated manufacturing overhead was $1,200,000 and its estimated level of activity was 50,000 direct labor-hours. The company's direct labor wage rate is $12 per hour. Actual manufacturing overhead amounted to $1,240,000, with actual direct labor cost of $650,000. Direct materials cost was $700,000.

Instructions

1. Calculate predetermined overhead rate;

2. Calculate manufacturing overhead applied;

3. Calculate total cost of a job;

4. Calculate underapplied or overapplied overhead;

5. Calculate Adjusted COGS, assuming unadjusted COGS is $6,350,000.