Question
Kody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the
Kody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
Machine-hours required to support estimated production | 150,000 | |||||||||||||||||
Fixed manufacturing overhead cost | $ | 750,000 | ||||||||||||||||
Variable manufacturing overhead cost per machine-hour | $ | 4.00 | ||||||||||||||||
Required:
|
Compute the total manufacturing cost assigned to Job 500.
3a. During the year the company worked a total of 147,000 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,325,000. What is the amount of underapplied or overapplied overhead for the year? (Input the amount as a positive value.)
3-b. If this amount were closed out entirely to Cost of Goods Sold, would the journal entry increase or decrease net operating income?
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