Problem 4-53. Overhead Application and Job-Order Costing

Objective: Compute the predetermined overhead rate, and use the rate to assign overhead to units or services produced. Describe the cost flows associated with job order costing

Heurion Company is a job-order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows

Overhead: $789,000

Direct Labor Hours: 100,000

Heurion worked on five jobs in July. Data are as follows

Job 741 Job 742 Job 743 Job 744 Job 745 Balance, July 1 $29,870 $55,215 $27,880 $ 0 $ 0 Direct materials $25,500 $39,800 $14,450 $13,600 $ 8,420 Direct labor cost $61,300 $48,500 $28,700 $24,500 $21,300 Direct labor hours 4,000 3,400 1,980 1,600 1,400

By July 31, Jobs 741 and 743 were completed and sold. The remaining jobs were in process.

Required:

1. Calculate the plant-wide overhead rate for Heurion Company. (Note: Round to the nearest cent.)

2. Prepare job-order cost sheets for each job showing all costs through July 31. (Note: Round all amounts to the nearest dollar.)

Check Figure: Total cost Job 741 = $148,230

3. Calculate the balance in Work in Process on July 31.

4. Calculate Cost of Goods Sold for July

Check Figure: Cost of goods sold = $234,882

(Please Show Formulas For Questions)