Normal job costing, unit costs. (J. Watson) Pearson Ltd. uses a normal job costing system @ ©

and applies overhead on the basis of direct labour-hours. At the beginning of the year, the | ¢1) per direct labour-hour company estimated that total overhead costs for the year would be $180,000, and it budgeted total labour-hours of 15,000.Actual labour-hours worked for the period January 1 to November 30 were 13,750.

On December 1, the company had three jobs in process:

In addition, the company incurred the following costs during the month of December (these costs have not yet been recorded in the books):

ADDITIONAL INFORMATION 1. The balance in the Overhead Control account on December 1 was $195,010.
2. There were no jobs in Finished Goods as of December 1.
3. Jobs # 815, 822, 823 and 824 were completed during December.
4. Job 824 is the only job in Finished Goods as of December 31.
5. The company’s pricing policy is 200% of total manufacturing cost.
REQUIRED 1. Calculate the budgeted overhead rate used by Pearson.
2. Calculate the unit cost of ending work-in-process inventory assuming that the number of units in the job(s) total 250 units .
3. Calculate the cost of goods manufactured and the unadjusted gross margin for the month of December.
4. Calculate the amount of overallocated or underallocated overhead for the year.LO1

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Work-in-Process at December 1 Job Number 815 817 822 Direct Materials (DM) $1,400 $2,500 $1,700 Direct Labour (DL) $1,200 $2,400 $ 600 Overhead (OH) $ 600 $1,350 Total $3,200 $6,250 $ 450 $2,750 During the month of December the following costs were incurred by job: Job # 815 817 822 823 824 DM $500 $ 700 $1,300 $1,250 $1,500 DL $900 $1,440 $3,060 $3,960 $5,940 DL hours 50 hours 80 hours 170 hours 220 hours 330 hours