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Teach King Company prints custom training material for corporations. The business was started January 1, 2014. The company uses a normal-costing system. It has two
Teach King Company prints custom training material for corporations. The business was started January 1, 2014. The company uses a normal-costing system. It has two direct cost pools, materials and labor, and one indirect cost pool, overhead. Overhead is charged to printing jobs on the basis of direct labor cost. The following information is available for 2014. (Click the icon to view the following data.) There were two jobs process on December 31, 2014: Job 11 and Job 12. Costs added to each job as of December 31 are as follows: (Click the icon to view the costs.) Teach King Company has no finished goods inventories because all printing jobs are transferred to cost of goods sold when completed. Read the requirements. Requirement 1. Compute the overhead allocation rate. Select the formula and enter the amounts to calculate the overhead allocation rate. (Enter the rate in decimal format to one decimal place, X.X. Do not enter the rate as a percentage.) = Overhead allocation rate Data Table Data Table $ 290.000 Budgeted direct labor costs Budgeted overhead costs Costs of actual material used $ 406.000 $ 158,000 Direct materials Direct labor Actual direct labor costs $ Job 11 S 4,360 $ 5,000 275.000 387,500 Actual overhead costs $ Job 12 S 5,090 $ 7,000 Print Done Print Done Choose from any list or enter any number in the inpl ? Requirements 1. Compute the overhead allocation rate. 2. Calculate the balance in ending work in process and cost of goods sold before any adjustments for under- or overallocated overhead. 3. Calculate under- or overallocated overhead. 4. Calculate the ending balances in work in process and cost of goods sold if the under-or overallocated overhead amount is as follows: Written off to cost of goods sold b. Prorated using the overhead allocated in 2014 (before proration) in the ending balances of cost of goods sold and work-in-process control accounts 5. Which of the methods in requirement 4 would you choose? Explain. a. Print Done
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