Crandall Corporation makes portable enclosures for festivals, concerts, and other events Its products arent mass producedeach unit is made to customer specifications Crandall employs a normal job costing system Direct labor at the company is compensated at a rate of $21 per hour however, employees receive no pay when they arent working on jobs A predetermined rate based on direct labor hours is used to assign manufacturing overhead to jobs In the past two years, the company incurred manufacturing overhead costs (adjusted for price level changes using current prices and wage rates) as follows Year 1 Year 2 Direct labor hours worked 144,000 118,000 Manufacturing overhead costs incurred Indirect labor $4,580,000 $5,603,340 Employee benefits 2,204,000 3,134,000 Supplies 858,000 1,367,400 Power 620,000 987,420 Heat and light 244,000 210,870 Supervision 598,000 721,970 Depreciation 2,370,000 2,370,000 Property taxes and insurance 945,000 945,000 Total manufacturing overhead costs $12,419,000 $15,340,000 At the start of Year 3, Crandall has two jobs not yet delivered to customers Job AT 360 was completed on December 15, Year 2 Its scheduled to ship out on January 21, Year 3 Job AT 365 is still in progress The predetermined rate in Year 2 was $155 per direct labor hour Data on direct material costs and direct labor hours for these jobs in Year 2 was as follows Job AT 360 Job AT 365 Direct Labor Cost 680,000 947,000 Direct Labor hours 4,800 hours 6,200 hours During Year 3, Crandall incurred direct material costs and direct labor hours for all jobs worked in Year 3, including the completion of Job AT 365, as follows Direct material cost $15,780,000 Direct labor hours 150,000 Actual manufacturing overhead $18,609,400 To compute the predetermined overhead rate, Crandall uses the previous years actual over head rate At the end of Year 3, three jobs had not been shipped Data on these jobs is as follows AT 285 AT 288 AT 292 Direct Materials $154,000 $224,500 $112,400 Direct Labor Hours 2,600 hours 3,400 hours 7,500 hours Job Status Finished Finished In Progress A What was the amount in the beginning Finished Goods and beginning Work in Process accounts for Year 3 B Crandall incurred direct materials costs of $210,000 and used an additional 800 hours in Year 3 to complete Job AT 365 What was the nal (total) cost charged to Job AT 365 C What was the overapplied or underapplied overhead for Year 3 D Crandall prorates any overapplied or underapplied overhead to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory Prepare a properly formatted journal entry to prorate the Overapplied or Underapplied Overhead calculated in requirement As an allocation basis, use the direct labor hours in each account from Year 3 E A customer requested that Crandall bid on a job to be nished in Year 4 Crandall has estimated that the job will need approximately $156,000 in direct materials and 8,000 direct labor hours Due to the condition of the economy, Crandall believes demand for its services will be below average in Year 4, and the CEO therefore would like to bid aggressively, but doesnt want to lose money on the project Crandall estimated essentially no sales or administrative costs connected with this job What is the minimum amount the company can bid on the job and not incur a loss (In order to perform an estimation of the variable portion of overhead, use the high low method )

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Crandall Corporation makes portable enclosures for festivals, concerts, and other events. Its products arent mass producedeach unit is made to customer specifications. Crandall employs a

Crandall Corporation makes portable enclosures for festivals, concerts, and other events. Its products aren’t mass produced—each unit is made to customer specifications. Crandall employs a normal job costing system. Direct labor at the company is compensated at a rate of $21 per hour; however, employees receive no pay when they aren’t working on jobs. A predetermined rate based on direct labor-hours is used to assign manufacturing overhead to jobs.

In the past two years, the company incurred manufacturing overhead costs (adjusted for price-level changes using current prices and wage rates) as follows:

	Year 1	Year 2
Direct labor-hours worked	144,000	118,000
Manufacturing overhead costs incurred:
Indirect labor	$4,580,000	$5,603,340
Employee benefits	2,204,000	3,134,000
Supplies	858,000	1,367,400
Power	620,000	987,420
Heat and light	244,000	210,870
Supervision	598,000	721,970
Depreciation	2,370,000	2,370,000
Property taxes and insurance	945,000	945,000
Total manufacturing overhead costs	$12,419,000	$15,340,000

At the start of Year 3, Crandall has two jobs not yet delivered to customers. Job AT-360 was completed on December 15, Year 2. It’s scheduled to ship out on January 21, Year 3. Job AT-365 is still in progress. The predetermined rate in Year 2 was $155 per direct labor-hour. Data on direct material costs and direct labor-hours for these jobs in Year 2 was as follows:

	Job AT-360	Job AT-365
Direct Labor Cost	680,000	947,000
Direct Labor-hours	4,800 hours	6,200 hours

During Year 3, Crandall incurred direct material costs and direct labor-hours for all jobs worked in Year 3, including the completion of Job AT-365, as follows:

Direct material cost	$15,780,000
Direct labor hours	150,000
Actual manufacturing overhead	$18,609,400

To compute the predetermined overhead rate, Crandall uses the previous year’s actual over- head rate. At the end of Year 3, three jobs had not been shipped. Data on these jobs is as follows:

	AT-285	AT-288	AT-292
Direct Materials	$154,000	$224,500	$112,400
Direct Labor-Hours	2,600 hours	3,400 hours	7,500 hours
Job Status	Finished	Finished	In-Progress

A. What was the amount in the beginning Finished Goods and beginning Work-in- Process accounts for Year 3?

B. Crandall incurred direct materials costs of $210,000 and used an additional 800 hours in Year 3 to complete Job AT-365. What was the nal (total) cost charged to Job AT-365?

C. What was the overapplied or underapplied overhead for Year 3?

D. Crandall prorates any overapplied or underapplied overhead to Cost of Goods Sold, Finished Goods Inventory, and Work-in-Process Inventory. Prepare a | properly formatted journal entry to prorate the Overapplied or Underapplied Overhead calculated in requirement. As an allocation basis, use the direct labor hours in each account from Year 3.

E. A customer requested that Crandall bid on a job to be nished in Year 4. Crandall has estimated that the job will need approximately $156,000 in direct materials and 8,000 direct labor-hours. Due to the condition of the economy, Crandall believes demand for its services will be below average in Year 4, and the CEO therefore would like to bid aggressively, but doesn’t want to lose money on the project. Crandall estimated essentially no sales or administrative costs connected with this job. What is the minimum amount the company can bid on the job and not incur a loss? (In order to perform an estimation of the variable portion of overhead, use the high-low method.)