Question

1.

Copy Center pays an average wage of $13 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Direct materials are assigned to each job according to actual cost. Jobs are marked up 20% above total manufacturing cost to determine the selling price. If Job M-47 used $370 of direct materials and took 15 direct hours of labor to complete, what is the selling price of the job?

rev: 11_20_2019_QC_CS-191445

• $912.

• $768.

• $678.

• $1,002.

ob A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,600 of direct materials and used $4,100 of direct labor. The job was not finished by the end of September, but needed an additional $3,100 of direct materials in October and additional direct labor of $6,600 to finish the job. The company applies overhead at the end of each month at a rate of 150% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October?

• $16,400

• $23,700

• $29,400

• $32,450

• $19,600

3.

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $380,000, and direct labor costs to be $190,000. Actual overhead costs for the year totaled $406,000, and actual direct labor costs totaled $214,000. At year-end, the balance in the Factory Overhead account is a:

• $22,000 Debit balance.

• $428,000 Credit balance.

• $406,000 Debit balance.

• $22,000 Credit balance.

• $214,000 Debit balance.

Answer 1

1.

Job M-47
Direct materials	$370
Direct labor ( 15 X $13 per hour)	195
Overhead applied (15 X $18 per hour)	270
Total cost	$835

Selling price of the job = Total manufacturing cost + 20% of Total manufacturing cost

= $835 + 20% of $835

= $835 + $167 = $1,002

2.

Costs added during October :	Amount
Direct materials	$3,100
Direct labor	6,600
Overhead applied (6,600 X 150%)	9,900
Total cost	$19,600

Job costs added to Work in Process Inventory during October = $19,600

3.

==> Predetermined overhead rate = Estimated overhead cost / Estimated direct labor cost X 100

= $380,000 / $190,000 = 200%

==> Applied overhead = 200% of actual direct labor cost

= 200% of $214,000 = $428,000

==> Actual overhead cost = $406,000

From the above information actual overhead cost is less than the applied overhead cost. So Factory overhead account shows the $22,000 credit balance ($428,000 - $406,000). Overhead cost $22,000 is overapplied.