Question
Heritage Gardens provides complete garden design and landscaping services. The company uses a job ordering costing system to track the costs of its landscaping projects.
Heritage Gardens provides complete garden design and landscaping services. The company uses a job ordering costing system to track the costs of its landscaping projects. Below is the data concerning three landscaping projects that were in progress in May. There was no work in progress at the beginning of May.
Project | Williams | Chandler | Nguyen |
Designer hours | 200 | 80 | 120 |
Direct materials | $4,800 | $1,800 | $3,600 |
Direct labor | $2,400 | $1,000 | $1,500 |
Actual overhead cost for May were $16,000. Overhead cost are applied to projects on the basis of designer hours because most of the overhead is related to the costs of the garden design studio. The predetermined overhead rate is $45 per designer hour. The Williams and Chandler project were completed in May: the Nguyen project was not completed by the end of the month. No other jobs were in process during May. 1) Compute the amount of overhead cost that would have applied to each project during May. 2) Determine the costs of goods manaufactured for May. 3) What is the accumulated cost of the work in progress at the end of the month? 4) Determine the underapplied or overapplied overhead for May.
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