Question: Powell Company uses a job costing system. During the month of May, Powell spent most of its time on job A50, which was started late in April. Following is cost information for job A50, other May costs, and relevant annual estimates.
Materials issued:
80% for Direct Use on job A50 and
20% for Indirect Use through May $ 5.000
Labor:
Direct Labor for job A50
(300 DLH @ $20 per DLH) 6.000
Indirect Labor for May 310
Other May Costs:
Depreciation (70% Factory and 30% Administrative) 1.000
Other (70% Factory and 30% Administrative) 700
Overhead Cost Driver: Direct Labor Hours (DLH)
Estimated Annual Overhead 21,000
Estimated Annual DLH 3,000
Markup -- as a percent of cost 40%
Required to do:
(Q1) What is the overhead to be applied for May to job A50 upon completion on May 15?
(Q2) What are total manufacturing costs for May for job A50?
(Q3) What is the profit on job A50 when it is sold on May 15?
(Q4) Calculate the under- or over-applied overhead for May.