Question
1. Calculate JIP at the end of May. Show formula 2. Calculate CCJ for May. Show formula 3. Calculate under- or overallocated overhead at the
1. | Calculate JIP at the end of May. Show formula | |
2. | Calculate CCJ for May. Show formula | |
3. | Calculate under- or overallocated overhead at the end of May. Show formula | |
4. | Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows: | |
a. | Written off to CCJ Show formula | |
b. | Prorated based on the ending balances (before proration) in JIP and CCJ | |
c. | Prorated based on the overhead allocated in May in the ending balances of JIP and CCJ (before proration) Show formula | |
5. | Which method would you choose? Explain. Would your choice depend on whether overhead cost is underallocated or overallocated? Explain. |
Powerful Leads performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups to review foods, cleaningproducts, and toiletries.
Powerful Leads uses a normal-costing system with one direct-cost pool, labor, and oneindirect-cost pool, general overhead. General overhead is allocated to each job based on 130% of direct labor cost. Actual overhead equaled allocated overhead as of April 30,2017.Actual overhead in May was $94,130.
Following is cost information for May 2017:
From Beginning JIP | Incurred in May | |||
General | ||||
Overhead | ||||
Band | Labor | Allocated | Labor | |
Creamy Candy Bars | $38,110 | $29,000 | $15,000 | |
Aglow Toothpaste | 22,660 | 9,000 | 29,000 | |
Rojo Organic Salsa | - | - | 20,200 | |
Dazzle Dish Liquid | - | - | 5,900 |
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(Click the icon to view the cost information for May 2017.)
As of May
1, there were two jobs in progress:
Creamy Candy Bars, and Aglow Toothpaste. The jobs for Rojo Organic Salsa and Dazzle Dish Liquid were started during May. The jobs for Creamy Candy Bars and Dazzle Dish Liquid were completed during May.
Requirement 3. Calculate under- or overallocated overhead at the end of May.
Overhead is | by $ | at the end of May. |
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