Our company uses Job Order Costing. There are no beginning inventory balances. The budget for 2021 showed that the company expected to work on just two jobs, A and B. The total budgeted overhead for 2021 was $147,000. The actual overhead for 2021 was $134,400. The budgeted and actual direct costs for these jobs are as follows.

Budgeted Costs Actual Costs

Job A Job B Job A Job B

Direct Material Cost $10,000 $20,000 $11,000 $18,000

Direct Labor Cost $30,000 $40,000 $32,000 $28,000

Regardless of whether the company is using actual costing or normal costing, overhead is charged to jobs using direct labor cost. Job A was completed during 2021, but Job B was unfinished as of the end of 2021.

8. Assume the company is using Actual Costing. Compute the ending balance in Work in Process for the company.

9. Assume the company is using Normal Costing. Compute the ending balance in Work in Process for the company.

10. Refer to question 9. Compute the underallocated or overallocated overhead for 2021 using Normal Costing