E12 Don Lieberman and Associates, a CPA rm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November.

Lynn Brian Mike Direct materials $600 $400 $200 Auditor labor costs $5,400 $6,600 $3,375 Auditor hours 72 88 45

Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $50 per auditor hour. The Lynn job is the only incomplete job at the end of November. Actual overhead for the month was $11,000. Instructions

(a) Determine the cost of each job. (b) Indicate the balance of the Service Contracts in Process account at the end of November. (c) Calculate the ending balance of the Operating Overhead account for November.

E13 Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each clients consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.

Estimated overhead $960,000 Actual overhead $982,800 Estimated decorator hours 40,000 Actual decorator hours 40,500

The company uses Operating Overhead in place of Manufacturing Overhead. Instructions

(a) Compute the predetermined overhead rate. (b) Prepare the entry to apply the overhead for the year. (c) Determine whether the overhead was under- or overapplied and by how much.