Question

Moody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production 153,000 Total estimated manufacturing overhead cost $ 1,369,350 Required: 1. Compute the predetermined overhead rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2. During the year, Job 400 was started and completed. The following information was available with respect to this job: Direct materials requisitioned $ 310 Direct labor cost $ 290 Machine-hours used 31 Compute the total manufacturing cost assigned to Job 400. (Do not round intermediate calculations and round final answer to 2 decimal places.) 3-a. During the year the company worked a total of 145,600 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,305,620. What is the amount of underapplied or overapplied overhead for the year? (Use the overhead rate determined in requirement 1.) 3-b. If this amount were closed out entirely to Cost of Goods Sold, would net operating income increase or decrease? Increase Decrease

Answer 1