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CompuFurn, Incorporated, manufactures furniture for computer work stations. CompuFurn uses a job-order costing system and employs absorption costing. CompuFurns work-in-process inventory on November 30 consisted

CompuFurn, Incorporated, manufactures furniture for computer work stations. CompuFurn uses a job-order costing system and employs absorption costing. CompuFurns work-in-process inventory on November 30 consisted of the following jobs.

Job Number Description Units Accumulated Cost
CC723 Computer caddy 20,000 $ 900,000
CH291 Chair 15,000 446,000
PS812 Printer stand 25,000 260,000
Total $ 1,606,000

On November 30, the companys finished-goods inventory, which is evaluated using the first-in, first-out (FIFO) method, consisted of four items.

Item Quantity and Unit Cost Accumulated Cost
Computer caddy 7,500 units @ $64 each $ 480,000
Chair 19,400 units @ $35 each 679,000
Printer stand 21,000 units @ $55 each 1,155,000
Desk 11,200 units @ $102 each 1,142,400
Total $ 3,456,400

At the end of November, the balance in CompuFurns Materials Inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from the materials inventory during the month of December included the following.

Additions Raw Materials Purchased Parts
Purchases $ 242,000 $ 396,000
Requisitions:
Job CC723 51,000 104,000
Job CH291 3,000 10,800
Job PS812 125,000 87,000
Job DS444 (5,000 desks) 65,000 187,000

CompuFurn applies manufacturing overhead on the basis of machine hours. The companys manufacturing overhead budget for the year totaled $4,500,000. The company planned to use 900,000 machine hours during this period, which is the firms estimated practical capacity. Through the first 11 months of the year, a total of 831,000 machine hours were used, and actual manufacturing overhead amounted to $4,139,000.

During the month of December, machine hours and labor hours consisted of the following:

Account Machine Hours Labor Hours Labor Cost
CC723 12,000 11,600 $ 122,400
CH291 4,400 3,600 43,200
PS812 19,500 14,300 200,600
DS444 14,000 12,500 138,000
Indirect labor 0 3,000 29,400
Supervision 0 0 57,600
Total 49,900 45,000 $ 591,200

The jobs completed in December and the unit sales for that month are as follows:

Job Number Production Items Quantity Completed Item Quantity Shipped
CC723 Computer caddy 20,000 Computer caddy 17,500
CH291 Chair 15,000 Chair 21,100
DS444 Desks 5,000 Printer stand 18,000
Desk 6,000

Case 3-61 (Algo) Part 3 Calculate the cost of the chairs in CompuFurn's Finished-Goods Inventory

3. Calculate the cost of the chairs in CompuFurns Finished-Goods Inventory as of December 31.

4. Actual manufacturing overhead incurred in December amounted to $252,000. Calculate CompuFurns overapplied or underapplied overhead for the year.

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