Question - Century Pools designs and builds custom pools and spas to the customer's order and uses a job order system. The predetermined overhead rate for the current year is 60% of direct labor cost.
At the end of the current year, Century Pools' direct labor cost totaled $170,000 and actual overhead amounted to $105,000.
A pool built for F. Becker required $32,000 of direct materials and $6,500 of direct labor. It was completed in May of the current year.
(a) Compute the total cost of the Becker pool as shown on the job cost sheet at date of completion.
(b) Compute the amount of under- or over-applied manufacturing overhead for Century's operations for the current year.
(c) What disposition is made of over- or under-applied overhead at the end of the year (assume that the amount is not material)?