Comprehensive) Tiny Tots Corp. is a manufacturer of furnishings for infants and children. The company uses a job order cost system. Tiny Tots’ Work in Process Inventory on April 30, 2006, consisted of the following jobs:

Tiny Tots applies factory overhead on the basis of direct labor hours.
The company’s factory overhead budget for the year ending May 31, 2006, totals $4,500,000, and the company plans to expend 600,000 direct labor hours during this period. Through the first 11 months of the year, a total of 555,000 direct labor hours was worked, and total factory overhead amounted to $4,273,500.
At the end of April, the balance in Tiny Tots’ Raw Material Inventory ac¬ count, which includes both raw material and purchased parts, was $668,000. Additions to and requisitions from the material inventory during May in¬ cluded the following:

a. Describe when it is appropriate for a company to use a job order cost¬ ing system.

b. Calculate the dollar balance in Tiny Tots' Work in Process Inventory ac¬ count as of May 31, 2006.

c. Calculate the dollar amount related to the playpens in Tiny Tots' Fin¬ ished Goods Inventory as of May 31, 2006.

d. Explain the treatment of underapplied or overapplied overhead when using a job order costing system.
(CMA adapted)LO1.

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Job No. Items Units Accumulated Cost CBS102 PLP086 Cribs 20,000 $ 900,000 Playpens 15,000 420,000 DRS114 Dressers 25,000 1,570,000 The company's finished goods inventory, carried on a FIFO basis, consists of five items: Quantity and Unit Cost Item Total Cost Cribs Strollers 7,500 units @ $64 13,000 units @ $23 $ 480,000 299,000 Carriages 11,200 units @ $102 1,142,400 Dressers 21,000 units @ $55 1,155,000 Playpens 19,400 units @ $35 679,000 Total $3,755,400