Job cost

1.Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from the others, Susan Byrd, the company's accountant, decided to use a job-order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead allocation. In December 2021, she estimated the following amounts for the year 2022:

Direct materials - $14,560,000

Construction labour - $10,200,000

Overhead - $7,900,000

Construction labour-hours - 500,000

Byrd recorded the following for the second quarter of 2022 for the three jobs that the company started and completed during the quarter.

School Residential Cinema

Direct materials $824,000 $1,034,600 $1,425,000

Construction labour-hours 66,400 37,200 18,500

Required:

1.Compute the predetermined overhead allocation rate for 2022 and apply overhead to the three jobs.

2.Compute the cost of each job.

3.Harwood Company is a manufacturing firm that operates a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would incur $192,000 in manufacturing overhead costs and work 80,000 machine-hours.

Required:

1.Compute the company's predetermined overhead rate.

2.Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materialsused in production(noton the basis of raw materials purchased). In computing a predetermined overhead rate at the beginning of the year, the company's estimates were as follows: manufacturing overhead cost, $650,000; direct materials to be used in production, $500,000. The company's inventory accounts at the beginning and end of the year were as follows:

Beginning Ending

Raw Materials $80,000 $20,000

Work in Process 70,000 150,000

Finished Goods 400,000 260,000

The following actual costs were incurred during the year:

Purchase of raw materials (all direct) $510,000

Direct labour cost 90,000

Manufacturing overhead costs:

Indirect labour 170,000

Property taxes 48,000

Depreciation of equipment 260,000

Maintenance 95,000

Insurance 7,000

Rent, building 180,000

Required:

1-a.Compute the predetermined overhead rate for the year.

2.Prepare schedule of cost of goods manufactured for the year.

3.Compute the cost of goods sold for the year.