Parker Company Uses a Job-Order Costing System and Applies Manufacturing

question 79

Essay

Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at $50,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs.
Required:
a. Job #461 contained 100 units. Determine the unit product cost that would appear on the job cost sheet.
b. Determine the underapplied or overapplied overhead for the year.

---

Definitions:

Belief Perseverance

The tendency for people to hold onto their beliefs even when presented with evidence that contradicts them.

Professor

A senior academic instructor or faculty member at a college or university, often involved in teaching, research, and mentoring students.

Unfriendly

Exhibiting or characterized by a lack of friendliness or warmth in attitude or behavior.

Framing

The perspective or angle from which a narrative, issue, or situation is presented and perceived, often influencing the interpretation and response of the audience.