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Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing

Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours.

At the beginning of the year, the company estimated manufacturing overhead for the year would be $280,000 and machine hours would be 7,000.

The following information pertains to December of the current year:

Job 10

Job 11

Job 12

Total

Work-in-process, Dec. 1

$16,000

$26,000

$38,000

$80,000

December production activity:

Materials requisitioned

$ 4,000

$ 4,800

$ 7,200

$16,000

Direct labor cost

$ 2,400

$ 3,600

$ 4,000

$10,000

Machine hours

100

200

300

600

Labor hours

120

180

200

500

Actual manufacturing overhead cost incurred in December was $23,000.

Required:

A.

Compute the predetermined overhead application rate.

B.

Determine the total cost associated with each job.

C.

If Jobs 10 and 12 were completed, prepare the journal entry to move the cost.

D.

If Job 10 was delivered to customers that paid $50,000 cash, prepare the journal entries.

E.

What is the gross margin for Job 10?

F.

What is the cost assigned to ending work in process?

G.

Assuming no beginning finished goods what is the cost assigned to ending finished goods?

H.

How much was overhead over/underapplied?

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