MarketValue performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups to reviewfoods, cleaningproducts, and toiletries. MarketValue uses anormal-costing system with onedirect-cost pool,labor, and oneindirect-cost pool, general overhead. General overhead is allocated to each job based on 140% of direct labor cost. Actual overhead equaled allocated overhead as of April 30, 2017. Actual overhead in May was $125,000.

All costs incurred during the planning stage for a market research job and during the job are gathered in a balance sheet account called"Jobs in Progress(JIP)." When a job iscompleted, the costs are transferred to an income statement account called"Cost of Completed Jobs(CCJ)."

As of May 1, there were two jobs inprogress: Craze Candy Bars, and Shimmer Toothpaste. The jobs for Roja Organic Salsa and Shine Dish Liquid were started during May. The jobs for Craze Candy Bars and Shine Dish Liquid were completed during May.

1.

Calculate JIP at the end of May .

2.

Calculate CCJ for May .

3.

Calculate under- or overallocated overhead at the end of May.

4.

Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows:

a.

Written off to CCJ

b.

Prorated based on the ending balances (before proration) in JIP and CCJ

c.

Prorated based on the overhead allocated inin the ending balances of JIP and CCJ (before proration)

5.

Which method would you choose? Explain. Would your choice depend on whether overhead cost is underallocated or overallocated? Explain.

From Beginning JIP Incurred in May

General

Overhead

Band Labor Allocated Labor

Craze Candy Bars $4,320 $24,000 $18,000

Shimmer Toothpaste 6,680 1,000 37,000

Roja Organic Salsa - - 24,600

Shine Dish Liquid - - 5,400