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Georgia Woods, Inc., manufactures furniture to customers' specifications and uses job order costing. A predetermined overhead rate is used in applying manufacturing overhead to individual
Georgia Woods, Inc., manufactures furniture to customers' specifications and uses job order costing. A predetermined overhead rate is used in applying manufacturing overhead to individual jobs. In Department One, overhead is applied on the basis of machine-hours, and in Department Two, on the basis of direct labor hours. At the beginning of the current year, management made the following budget estimates to assist in determining the overhead application rate. Direct labor cost Direct labor hours Manufacturing overhead Machine-hours Department One $ 300,000 20,000 $ 420,000 12,000 Department Two $ 225,000 15,000 $ 337,500 7,500 Production of a batch of custom furniture ordered by City Furniture (job no. 58) was started early in the year and completed three weeks later on January 29. The records for this job show the following cost information. Department One Department Two Job order: City Furniture (job no. 58): Direct materials cost Direct labor cost Direct labor hours Machine-hours $ 10,100 $ 16,500 1,100 750 $ 7,600 $ 11,100 740 500 Selected additional information for January is as follows. Direct labor hours-month of January Machine-hours-month of January Manufacturing overhead incurred in January Department One 1,600 1,100 $ 39,010 Department Two 1,200 600 $ 26,540 Required: a. Compute the predetermined overhead rate for each department. b. What is the total cost of the furniture produced for City Furniture? c. Prepare the entries required to record the sale (on account) of the furniture to City Furniture. The sales price of the order was $147,000. d. Determine the over- or underapplied overhead for each department at the end of January. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) per machine-hour Department One overhead application rate Department Two overhead application rate per direct labor hour Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What is the total cost of the furniture produced for City Furniture? Total cost Journal entry worksheet Record the revenue from sale to City Furniture. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Determine the over- or underapplied overhead for each department at the end of January. overhead Dept. One Dept. Two overhead
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