At the beginning of the year, Paxton Company budgeted overhead of $180,000 and 20,000 direct labor hours. During the year, Job #K456 was completed with the fol- lowing information: direct materials cost, $4,140; direct labor cost, $4,000. The aver- age wage for Paxton Company is $10 per hour.
By the end of the year, a total of 21,000 direct labor hours had actually been worked, and Paxton Company incurred the following actual overhead costs for the year:
|
Equipment lease
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$ 5,000
|
|
Depreciation on building
|
20,000
|
|
Indirect labor
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101,300
|
|
Utilities
|
18,000
|
|
Other overhead
|
45,000
|
Required
1. Calculate the overhead rate for the year.
2. Calculate the total cost of Job #K456.
3. Prepare the journal entries to record actual overhead and to apply overhead to production for the year.
4. Is overhead over- or underapplied? By how much?
5. Assuming that the normal cost of goods sold for the year is $740,000, what is the adjusted cost of goods sold?