Sample work problem below

Greenway Irrigation Systems uses job order costing and applies manufacturing overhead to individual jobs by using predetermined overhead rates. In the Fabrication Department, overheat is applied on the basis of machine-hours, and in the Installation Department, it is applied on the basis of direct labor hours. At the beginning of the current year, management made the following budiget estimates as a step toward determining the overhead application rates. Production of a 5,350 linear-foot irrigation system for Thompson Orchards (job no. 399) was started and completed in March of the current year. Cost records for this job reveal the following information. Chapter 17 Job Order Cost Systems and Overhead Allocations Instructions a. Determine the overhead rate that should be used for each department in applying overhead costs to job no. 399. b. What was the total cost of job no. 399, and what was its cost per linear-foot? c. Prepare the journal entries required to record the sale (on account) of job no. 399 to Thompson Orchards. The total sales price was $49,000. d. Assume that actual overhead costs for the year were $612,000 in the Fabrication Department, and $175,000 in the Installation Department. Assume also that actual machine-hours in the Fabrication Department were 8,200, and actual direct labor hours in the Installation Department were 14,500 during the year. On the basis of this information, determine the over-or underapplied overhead in each department for the year. Sample Worked Problem: Problem 17.4B Greenway Irrigation Systems Part A Fabrication Department overhead application rate: Manufacturing Overhead = Machine-Hours \begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{ Installation Department overhead application rate: } \\ \hline \multicolumn{4}{|c|}{ Manufacturing Overhead } & \multirow[t]{2}{*}{=} & \\ \hline \multicolumn{5}{|c|}{ Direct Labor Hours } & \\ \hline \multicolumn{6}{|c|}{ Part B } \\ \hline & \multicolumn{5}{|l|}{ Job no. 399: } \\ \hline 3[ & & & Fabrication & Installation & Total \\ \hline \multicolumn{6}{|c|}{4 Direct materials } \\ \hline 15[ & \multicolumn{5}{|l|}{ Direct labor } \\ \hline 16 & \multicolumn{5}{|l|}{ Manufacturing overhead: } \\ \hline 17 & & Fabrication & & & \\ \hline 18 & & Installation & & & \\ \hline 19 & \multicolumn{5}{|l|}{ Total cost of job no. 399} \\ \hline 20 & \multicolumn{5}{|l|}{ Cost per linear-foot } \\ \hline 21 & \multicolumn{5}{|l|}{ Part C } \\ \hline 22[ & \multicolumn{5}{|c|}{ General Journal } \\ \hline 23 & \multicolumn{5}{|c|}{ Accounts Receivable (Thompson Orchards) } \\ \hline 24 & & Sales & & & \\ \hline 25 & \multirow{2}{*}{\multicolumn{5}{|c|}{ Sale on account to Thompson Orchards }} \\ \hline 26 & & & & & \\ \hline 27 & \multicolumn{5}{|l|}{ Cost of Goods Sold } \\ \hline 28 & \multicolumn{5}{|c|}{ Finished Goods Inventory } \\ \hline 29 & \multicolumn{5}{|l|}{ Job no. 399} \\ \hline 30 & \multicolumn{5}{|l|}{ Part D } \\ \hline 31 & & & & Fabrication & Installation \\ \hline 32 & \multicolumn{5}{|l|}{ Actual overhead for the year } \\ \hline 33 & \multicolumn{5}{|c|}{ Overhead applied: } \\ \hline 34 & \multicolumn{5}{|c|}{\begin{tabular}{|l|l|} Fabrication \\ \end{tabular}} \\ \hline 35 & & & & & \\ \hline 36 & \multicolumn{5}{|c|}{ Overapplied overhead-Fabrication Department } \\ \hline 37 & \multicolumn{5}{|c|}{ Underapplied overhead-Installation Department } \\ \hline 38 & & +2 & & & \\ \hline \end{tabular} rates. In the Instaflation Divion, overbead is applied on the basis of direct boor bours and in the Disponal Division, overhead is applied to determine overhead application rate. Mearefortorioz Onerbed Direct Laler Boms Masefortariaz Orerted Information pertaining to this projest is prosided below. Toss of Delais Instructions 2. Determine the overhead rate that should be used by ach divtsion in appbing overhead costs to job no, 652 2. What was the total cose of job na. 652 , and wtut was its cost per squarefoole c. Prepare the journal entries required to record the sale (on account) of job na. 652 to Hensel Grocery wholesalen. The total siles price =560,000. C. Asurme thrs actwal ovethead costs for the jear sere $98.000 in the Installation Divicion. and $41,000 in the Disposal Division. Assume atso that actual firect labor hours used by the Installation Division were 24.000, and actual debris tonnage remored by the Disposal Divicion toesied 312 tons for the jear. On the basis of this information, determine the over- or underapplied overtiesd in cach division for the year