ScaleDown Inc. is a manufacturer of furnishings for infants and children. The company uses a normal job-order costing system. ScaleDown's WIP inventory at April 30, 2015, consisted of the following jobs:

The company's finished goods inventory, using the FIFO method, consisted of five items:

ScaleDown applies factory overhead on the basis of direct labour hours. The company's fac- tory overhead budget for the fiscal year ending May 31, 2015, totalled $4,500,000 and the com- pany plans to expend 600,000 direct labour hours during this period. Through the first 11 months of the year, a total of 555,000 direct labour hours were worked and total factory over- head amounted to $4,273,500.
At the end of April, the balance in ScaleDown's raw materials inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from raw materials inventory during the month of May included:

During the month of May, ScaleDown's factory payroll consisted of the following:

The following charts show jobs completed and units shipped for the month of May:

ItemsQuantity Shipped
Cribs.............................................17,500
Playpens........................................21,000
Strollers.........................................14,000
Dressers.........................................18,000
Carriages.........................................6,000
Required:
1. Describe when it is appropriate for a company to use a job-order cost system.
2. Calculate the dollar balance in ScaleDown's WIP inventory account as at May 31, 2015.
3. Calculate the dollar amount related to the playpens in ScaleDown's finished goods inventory as at May 31, 2015.
4. Explain the proper accounting treatment for over- or underapplied overhead balances when using a job-order cost system.

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Job Number CBS102 PLP086 DRS114 Items Units Accumulated Cost $ 900,000 Cribs Playpens Dressers 20,000 25,000 250,000 $1,570,000 Quantity and Unit Cost 7,500 units @ $64 each 13,000 units @ S23 each 11,200 units @ $102 each 21,000 units @ $55 each 19,400 units @ S35 each Accumulated Cost $ 480,000 Item Cribs Strollers Carriages Dressers Playpens 1,142,400 1,155,000 679,000 $3,755,400