Granite Company Uses a Job-Order Costing System

question 109

Essay

Granite Company uses a job-order costing system. The company 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 $80,000 and 16,000 hours respectively, for the year. In June, Job #315 was completed. Materials costs on the job totaled $1,500 and labor costs totaled $2,400 at $6 per hour. At the end of the year, it was determined that the company worked 15,000 direct labor-hours for the year, and incurred $78,000 in actual manufacturing overhead costs.
Required:
a. Determine the predetermined overhead rate for the year.
b. Determine the amount of overhead charged to jobs during the year.
c. Determine the amount of underapplied or overapplied overhead for the year.
d. Assuming that 100 units were completed, determine the unit cost that would appear on the job cost sheet for Job #315.

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Definitions:

Dominant Genes

Genes that overpower their recessive counterparts and determine the phenotype of an organism.

Heterozygous Pairs

In genetics, refers to a pair of genes where one is dominant and the other is recessive; they're different alleles for a specific trait.

Gonads

The reproductive organs in animals and humans that produce gametes; testes in males and ovaries in females.

Adrenal Glands

Small glands located on top of each kidney, responsible for producing hormones that regulate metabolism, immune system, blood pressure, and stress responses.