Mathews Guitar Company makes high-quality customized guitars. Mathews uses a job order costing system. Because the guitars are handmade, the company applies overhead based on direct labor hours. At the beginning of the year, the company estimated that total manufacturing overhead costs would be $88,880 and that 20,200 direct labor hours would be worked. At year-end, Dave, the company's founder and CEO, gives you the following information regarding Mathews's operations:
1. The beginning balances in the inventory accounts were: Raw Materials Inventory $6,000 Work in Process Inventory $35,000 Finished Goods Inventory $50,000
2. During the year, the company purchased raw materials costing $77,000 for cash.
3. The production department requisitioned $62,000 of raw materials for use in production. Of those, 70% were direct materials and 30% were indirect materials.
4. The company used 21,200 direct labor hours at a cost of $12 per hour during the year.
5. The company used 4,600 indirect labor hours at a cost of $10 per hour.
6. The company paid $46,800 for insurance, utilities, and property taxes on the factory.
7. The company recorded factory depreciation of $17,100.
8. The company applied manufacturing overhead to inventory based on the 21,200 labor hours actually worked during the year.
9. Products costing $398,000 were completed during the year and transferred to the Finished Goods Inventory.
10. During the year, the company sold products costing a total of $405,000.
11. The company closes under- and overapplied overhead to Cost of Goods Sold. I only need anwser for No.8 and No.
12.Prepare journal entries for each of the transactions just listed. Also MonkeySuits, Inc., makes costumes for movies and television shows. Jay Tribini, the company's owner, prepared the following estimates for the upcoming year: Manufacturing overhead cost $660,000 Direct labor hours 30,000 Direct labor cost $299,000 Machine hours 24,700 Assume that Monkeysuits applies manufacturing overhead on the basis of direct labor cost. During the year, $327,000 in direct labor cost was incurred.
13.How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $728,200, was overhead under- or overapplied during the year? By how much? I get applied overhead 721806 and is correct. But how much is underapplied?