Tidy Furniture Company Uses a Job-Order Cost System Tidy Applies Overhead to Production at a Predetermined Rate of (Credits)appeared

question 77

Essay

Tidy Furniture Company uses a job-order cost system.The following debits (credits)appeared in the Work-in-Process account for February 2016:
$$\begin{array} { | l | l | r | r | } \hline & \text { Description } & \text { Debits } & \text { Credits } \\\hline \text { June 1 } & \text { Balance } & \$ 20,000 & \\\hline \text { Entire month } & \text { Direct Materials } & 80,000 & \\\hline \text { Entire month } & \text { Direct Labor } & 60,000 & \\\hline \text { Entire month } & \text { Manufacturing overhead } & 45,000 & \\\hline \text { Entire month } & & & \$ 120,000 \\\hline\end{array}$$
Tidy applies overhead to production at a predetermined rate of 75%,based on direct labor cost.Job 1000,the only job still in process at the end of June,has been charged with direct labor of $30,000.Tidy's Manufacturing Overhead account showed a credit balance of $10,000 at the end of February 2016.
Required:
(a)Calculate the amount of direct materials charged to Job 1000.
(b)Compute the actual overhead for February 2016.
(c)Assume that Tidy closes its Manufacturing Overhead account each month.Tidy does not prorate the manufacturing overhead variance.Prepare the entry to close the overhead account at the end of February,2016.

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Definitions:

Oral Promise

A commitment made verbally by one party to another without written documentation.

Remedy

A means of legal reparation, which can include monetary compensation, restorative justice, or specific performance in order to resolve a breach of the law.

Breached a Contract

The failure to perform any term of a contract, written or verbal, without a legitimate legal excuse, which may result in legal action against the party in breach.

Implied Warranties

Warranties not explicitly stated but presumed by law to provide certain assurances regarding the quality or functionality of a product.