question 1:

direct cost (material and labor ) is given for each job factory overhead can be distributed on the basis of labor hours utilised

FACTORY OVERHEAD RECOVERY RATE=

TOTAL FACTORY OVERHEAD/ TOTAL LABOR HOURS= 600000/200000= $3 PER LABOR HOUR

PRICE OF THE JOBS:

JOB 1:

DIRECT MATERIAL= $3000

DIRECT LABOR = $2000

FACTORY OVERHEAD= 200*3 =$600

total job cost= $5600

PRICE= 5600+60%= $8960

JOB 2

DIRECT MATERIAL= $3500

DIRECT LABOR = $3000

FACTORY OVERHEAD= 300*3 =$900

total job cost= $7400

PRICE= 7400+60%= $11840

Question 2

1. Assuming Modern Cabinets applies $510,000 of factory overhead to all of its jobs this year but has actual factory overhead of $505,000, has overhead been over- or underapplied?
2. If the current COGS is $2,000,000, what should the ending COGS be after reconciling the actual and applied overhead?