Scenario: Atchison Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows: Direct labor-hours Variable overhead costs Fixed overhead costs Total overhead 150,000 180,000 210,000 $1,155,000.00 712,800 $1,867,800.00 $1,386,000.00 712,800 $2,098,800.00 $1,617,000.00 712,800 $2,329,800.00 The expected volume is 180,000 direct labor-hours for the entire year. The following information is for September, when Jobs 6023 and 6024 were completed: Inventories, September 1 Materials and supplies $ 31,500 Work in process (Job 6023) $162,000 Finished goods $337,500 Purchases of materials and supplies Materials Supplies $445,500 $ 49,500 Materials and supplies requisitioned for production Job 6023 $148,500 Job 6024 123,750 Job 6025 Supplies 84,150 19,800 $376,200 Factory direct labor-hours (DLH) Job 6023 10,500 DLH Job 6024 9,000 DLH Job 6025 6,000 DLH Labor costs Direct labor wages (all hours @ $9) $229,500 Indirect labor wages (12,000 hours) Supervisory salaries 51,000 118,800 Building occupancy costs (heat, light, depreciation, etc.) Factory facilities Sales and administrative offices $21,450 8,250 Factory equipment costs Power 13,200 Repairs and maintenance Other 4,950 8,250 $26,400 REQUIRED Answer the following questions: 1. Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. (Note: Regardless of your answer to requirement [1], assume that the predetermined overhead rate is $10 per direct labor-hour. Use this amount in answering requirements [2] through [5].) 2. Compute the total cost of Job 6023 when it is finished. 3. How much of factory overhead cost was applied to Job 6025 during September? 4. What total amount of overhead was applied to jobs during September? 5. Compute actual factory overhead incurred during September. 6. At the end of the year, Atchison Company had the following account balances: Overapplied Overhead Cost of Goods Sold Work-in-Process Inventory Finished Goods Inventory $ 3,300 3,234,000 125,400 270,600 How would you recommend treating the over applied overhead, assuming that it is not material? Show the new account balances in the following table: Overapplied Overhead Cost of Goods Sold Work-in-Process Inventory Finished Goods Inventory Answers