Westan corporation uses a predetermined overhead rate of $23.10 per

Chapter 4

 

1) Westan Corporation uses a predetermined overhead rate of $23.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $277,200 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours.

    The company incurred actual total manufacturing overhead costs of $266,000 and 12,600 total direct labor-hours during the period.

  

Required:

Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

 

2) A company assigns overhead cost to completed jobs on the basis of 120% of direct labor cost. The job cost sheet for Job 413 shows that $12,000 in direct materials has been used on the job and that $8,000 in direct labor cost has been incurred. A total of 200 units were produced in Job 413.

Required:

a. What is the total manufacturing cost assigned to Job 413?

 

b. What is the unit product cost for Job 413?

 

3) Kirkaid Company recorded the following transactions for the just completed month:

 

a.$84,000 in raw materials were requisitioned for use in production. Of this amount, $72,000 was for direct materials and the remainder was for indirect materials.

b.Total labor wages of $108,000 were incurred. Of this amount, $105,000 was for direct labor and the remainder was for indirect labor.

c.Additional actual manufacturing overhead costs of $197,000 were incurred.

d.A total of $218,000 in manufacturing overhead was applied to jobs.

 

Required:

Determine the underapplied or overapplied overhead for the month.

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