Chapter 4 Job Costing 117 I. Zurich Financial Services Group at www.zurich.com. 2. Reichhold Chemical Co. at www. reichhold com Nestle S. A. at www. Evian at nestle com -31 cost Flows: Applying overhead Erkens Company uses a job costing system with normal costing and applies factory overhead on the basis of machine-hours. At the beginning of the year man agement estimated that the company would incur S1,980,000 of factory overhead costs and use Erkens Company recorded the following events during the month of April a. Purchased 180,000 pounds of materials on account; the cost was $5.00 per pound b. Issued 120,000 pounds of materials to production, of which 15.000 pounds were used a indirect materials. c. Incurred direct labor costs of $240,000 and $40,000 of indirect labor costs. d. Recorded depreciation on equipment for the month, S75,700 e. Recorded insurance costs for the manufacturing property, $3,500 Paid $8,500 cash for utilities and other miscellaneous items for the manufacturing plant. g. Completed Job H11 costing $7,500 and Job G28 costing S77,000 during the month transferred them to the Finished Goods Inventory account. h. Shipped Job G28 to the customer during the month. The job was invoiced at 3%above Used 7,700 machine-hours during April uired rate for the year. Compute Erkens Company's predetermined overhead repare journal entries to record the events that occurred during April. journal ompute the amount of overapplied or underapplied overhead and prepare a ose overapplied or underapplied overhead into cost of goods so on April 30 that appi ny uses a job costing s