Smart Manufacturing Company manufactures furniture and they use job-order cost accounting system. The following transactions occurred in the first month of operations:

1. Direct materials requisitioned during the month:

Job 6 $12,000

Job 7 6,000

Job 8 14,000

$32,000

2. Direct labour incurred and charged to jobs during the month was:

Job 6 $20,000

Job 7 16,000

Job 8 10,000

$46,000

3. Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 80% of direct labour costs.

4. Actual manufacturing overhead costs incurred during the month amounted to $39,000.

5. Job 6 consisting of 2,000 units and Job 8 consisting of 400 units were completed during the month.

Instructions

a) How much manufacturing overhead was applied to Job 8 during the month?

b) Calculate the unit cost of Jobs 6 and 8.

c) What is the balance in Work in Process Inventory at the end of the month? Explain what is meant by work in process.

d) Calculate the amount if manufacturing overhead was under- or over-applied during the month. Explain how the company can use this information.