Kody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
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| Machine-hours required to support estimated production |
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151,000 |
| Fixed manufacturing overhead cost |
$ |
657,000 |
| Variable manufacturing overhead cost per machine-hour |
$ |
4.80 |
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| 1. |
Compute the predetermined overhead rate. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
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| Predetermined overhead rate |
$ per MH |
| 2. |
During the year Job 500 was started and completed. The following information was available with respect to this job:
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| Direct materials requisitioned |
$ |
340 |
| Direct labor cost |
$ |
250 |
| Machine-hours used |
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32 |
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Compute the total manufacturing cost assigned to Job 500. (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)
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| Total manufacturing cost |
$ |
| 3-a. |
During the year the company worked a total of 145,900 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,341,985. What is the amount of underapplied or overapplied overhead for the year? (Input the amount as a positive value. Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)
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| Manufacturing overhead cost (Click to select)overappliedunderapplied by |
$ |
| 3-b. |
If this amount were closed out entirely to cost of goods sold, would the journal entry increase or decrease net operating income?
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