job costing, accounting for overhead costs, budgeted rates.Jefferson Company is a paint¬

ing contractor for office and factory buildings. Jefferson uses a normal-costing system to cost each job.Jefferson’s normal-costing system has two direct-cost categories (direct materials and direct labour) and one indirect-cost pool called overhead costs. Jefferson uses a budgeted over¬

head rate for allocating overhead costs to jobs on the basis of direct labour costs.

Jefferson provides the following additional information:

1. Budgeted overhead costs for the year 2007 $1,440,000 Budgeted direct labour costs for the year 2007 $1,800,000 2. As of January 31, Job 101 was the only job in process, with direct materials costs of

$36,000 and direct labour costs of $60,000.

3. Jobs 102, 103, and 104 were started during February.

4. Direct materials used during February equal $180,000.

5. Direct labour costs for February are $144,000.

6. Actual overhead costs for February are $122,400.

7. The only job still in process at February 28, 2007 was job 104, with direct materials costs of $24,000 and direct labour costs of $48,000.

Jefferson maintains a Jobs in Process Control account in its general ledger. As a job is com¬

pleted,Jefferson immediately bills the client and transfers the cost ofthe completed job to the Cost of Jobs Billed account to be matched against the revenues billed to the client.

Consequently, unlike manufacturing companies,Jefferson does not have an account that cor¬

responds to Finished Goods Control. Each month, Jefferson closes any under- or overallo¬

cated overhead to Cost ofJobs Billed.

Instruction Form pairs to complete the following requirements.

Required 1. Calculate the budgeted overhead rate for allocating overhead costs in 2007.

2. Calculate the manufacturing overhead allocated to Job 101 as ofJanuary 31, 2007, and the manufacturing overhead allocated to Job 104 as of February 28, 2007.

3. Calculate the under- or overallocated overhead for February 2007.

4. Calculate the Cost ofJobs Billed byJefferson in February 2007.