Question
Constructo Incorporated Under or Overapplied Overhead Constructo Incorporated is a manufacturer of furnishings for infants and children. The company uses a job cost system
Constructo Incorporated Under or Overapplied Overhead Constructo Incorporated is a manufacturer of furnishings for infants and children. The company uses a job cost system and employs a full absorption accounting method for cost accumulation. Constructo's work-in-process inventory at April 30, 2001 consisted of the following jobs. Accumulated Job Number Items Unita Cost CBS102 Cribs 20,000 PLP086 DRS114 Playpens Dressers 15,000 25,000 $900,000 420,000 250,000 $ 1,570,000 The company's finished goods inventory, which Constructo evaluates using the FIFO (First-in, first-out) method, consisted of five items. Item Quantity and Unit Cost Cribs 7,500 units $ 64 each Accumulated Cost $480,000 Strollers 13,000 units $ 23 each Carriages Dressers Playpens 11,200 units $ 102 each 21,000 units $ 19,400 units @ $ 55 each 35 each 299,000 1,142,400 1,155,000 679,000 $ 3,755,400 Constructo applies factory overhead on the basis of direct labor hours. The company's factory overhead budget for the fiscal year ending May 31, 2001, totals $4,500,000, and the company plans to expend 600,000 direct labor hours during this period. Through the first eleven months of the year, a total of 555,000 direct labor hours were worked, and total factory overhead amounted to $4,273,500. At the end of April, the balance in Constructo's 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 May included the following.
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