Question
Juarez, Inc. designs and manufactures custom cabinets. The company uses a job-order costing system, and the allocates overhead at $18 per direct labor hour. Over
Juarez, Inc. designs and manufactures custom cabinets. The company uses a job-order costing system, and the allocates overhead at $18 per direct labor hour. Over or underapplied overhead is not material. During May, Juarezs transactions included the following:
Direct labor cost incurred at $15 an hour $5,400
Manufacturing overhead cost incurred 6,800
Direct materials purchased 11,500
Raw materials inventory, beginning 160
Raw materials inventory, ending 280
Sales 23,000
Selling expenses 2,100
Work in process inventory, beginning 220
Work in process inventory, ending 250
How much is over or underapplied overhead for May?
| a. | $320 underapplied | |
| b. | $1,400 overapplied | |
| c. | $6,800 underapplied | |
| d. | More information is needed |
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Fundamental Accounting Principles Volume I
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
978-1260305821
