Practice

Wk 4 - Apply Test [due Day 7) Saved Help Save & Exil O'Leary Corporation manufactures special purpose portable structures (huts. mobile offices. and so on) for use at construction sites. only builds to order (each unit is built to customer specifications) O'leary uses a normal job costing system. Direct labor at O'leary is paid $20 per hour. but the employees are not paid if they are not working on Jobs. Manufacturing overhead is assigned to jobs by a N predetermined rate on the basis of direct labor-hours, The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 67, 608 54, 680 Skipped Manufacturing overhead costs incurred Indirect labor $2, 784, 080 Employee benefits 1, 814, 808 $2, 184, 209 Supplies 676,008 546, 080 Power 653,008 528, 080 Heat and light 139, 280 139,280 Supervision 777,990 658, 050 Depreciation 2, 060, 590 2, 008, 500 Property taxes and insurance 763,310 769, 250 Total manufacturing overhead costs 38, 788, 090 $7, 644, 080 At the beginning of year 3, O'leary has two jobs, which have not yet been delivered to customers. Job MC-270 was completed on December 27. year 2. It is scheduled to ship on January 7, year 3. Job MC-275 is still in progress. For the purpose of computing the predetermined overhead rate. O'leary uses the previous year's actual overhead rate. Data on direct material costs and direct labor- hours for these jobs in year 2 follow. Job MC-278 Job MC-275 Direct material costs $270,602 $495, 608 Direct labor-hours 2, 530 hours 3, 230 hours During year 3. O'leary incurred the following direct material costs and direct labor-hours for all jobs worked in year 3. including the completion of Job MC-275. Direct material cost $11, 840, 606 Direct labor-hours 74, 680 Actual manufacturing overhead $ 9, 264, 080 At the end of year 3, there were four jobs that had not yet shipped. Data on these jobs follow. MC-389 MC-390 MC-397 Direct materials 343, 808 MC -399 $67, 609 Direct labor-hours $104, 108 1, 746 hours 2,730 hours $29, 508 Job status Finished Finished 6, 130 hours 1, 338 hours In progress In progress Required: a. What was the amount in the beginning Finished Goods and beginning Work-in-Process accounts for year 3? b. O'leary incurred direct materials costs of $57,600 and used an additional 360 hours in year 3 to complete job MC-275. What was the final (total) cost charged to job MC-275? c. What was over- or underapplied overhead for year s? d. O'leary prorates any over- or underapplied overhead to Cost of Goods Sold, Finished Goods Inventory. and Work-in-Process Graw