Constructo Inc. is a manufacturer of furnishings for infants and children. The company uses a job cost system and employs a full absorption accounting method for cos^ accumulation.

Constructo's work-in-process inventory at April 30, 19X8 consisted of the following jobs.

Constructo applies factory overhead on the basis of direct labor hours. The company's factory overhead budget for the fiscal year ending May 31, 19X8, totals $4,500,000 and the company plans to expend 600,000 direct labor hours during this penod. Through the first eleven months of the year, a total of 555,000 direct labor hours were worked, and total factory overhead amounted to $4,273,500.
At the end of April, the balance in Constructo's Materials Inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from the materials inventory during the month of May included the following.

REQUIRED 1. Describe when it is appropriate for a company to use a job cost system. 2. Calculate the dollar balance in Constructo's work-in-process inventory account as of May 31, 19X8. 3. Calculate the dollar amount related to the playpens in Constructo's finished goods inventory as of May 31, 19X8. 4. Explain the proper accounting treatment for overapplied or underapplied overhead balances when using a job cost system.

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Job No. Items Units Accumu- lated Cost CBS102 Cribs 20,000 $ 900,000 PLP086 Playpens 25,000 420,000 DRS114 Dressers 25,000 250,000 $1.570,000 The company's finished goods inventory, which Constructo evaluates using the FIFO (First-in, first-out) method, consisted of five items. Item Quantity and Unit Cost Accumulated Cost Cribs Strollers 7,500 units @ $ 64 each 13,000 units @ $ 23 each $ 480,000 299,000 Carriages 11,200 units @ $102 each 1,142,400 Dressers 21,000 units @ $ 55 each 1,155,000 Playpens 19,400 units @ $ 35 each 679,999 $3,755,400