Company XYZ makes customized uniforms. It incurs direct materials costs, direct labor costs, and indirect costs. It has a job-costing system with one cost pool for its indirect costs, which are allocated to the products made based on machine hours. Company XYZ pays its direct labor at a rate of $17 per direct labor hour. Select data for 2020 is as follows:

	Budgeted data	Actual data
Indirect costs	$826,000	$949,440
Machine hours	70,000	73,600
irect labor hours	43,750	48,000

Company XYZ worked on the Prete job from January to February of 2020, which used $7,400 in direct materials, 1,880 direct labor hours, and 9,500 machine hours, and consisted of 570 units.

7. Calculate the total cost and the cost per uniform of the Prete job using normal costing.

8. Calculate the total cost and the cost per uniform of the Prete job using actual costing.

9. Explain when Company XYZ knows the cost of the Prete job that you calculated in the previous two questions. Be specific your responses should include a month and year you expect this information to be available, and the explanation for why you chose that month and year.

a. Question 7

b. Question 8

10. Which form of job costing is Company XYZ most likely to use, and why?

11. Calculate the total amount of under- or overallocated indirect costs for Company XYZ in 2020.

12. Prepare the adjusting journal entry to dispose of the under- or overallocated indirect costs for Company XYZ in 2020 using the writeoff to COGS method. What is the impact of this entry on Company XYZs net operating income?