Greenlaw Products Uses Job Order Costing and Applies Overhead to Products

question 39

Essay

Greenlaw Products uses job order costing and applies overhead to products using direct labour hours.Greenlaw has determined that their predetermined overhead is $4.00 per direct labour hour when an estimated 200 000 direct labour hours are incurred.
During 2009 Greenlaw actually incurred a total of 215 000 direct labour hours and actual overhead costs ended up being $900 000.
Greenlaw has no ending work-in-process or finished goods inventories.
Required:
A. What were Greenlaw's estimated total overhead costs for the year?
B. By how much was overhead over or under-applied?
C. Assuming that cost of goods sold was $\$ 3000000$ prior to the adjustment for over- or underapplied overhead, what will be the cost of goods sold amount after the year-end adjustment?

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Definitions:

Mailing Address

The address to which mail is sent, including the recipient's name, street address, city, state, and postal code.

Letterhead

The top section of a letter or stationery, usually including a name, address, and a logo or corporate design, identifying the person or company.

Postal Code

A postal code is a series of letters, digits, or both, assigned to a postal address for the purpose of sorting mail.

Hyperlink

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