Question
Tiana Shar, the controller for Caesar Glassware Company, is in the process of analyzing the overhead costs for the month of November. She has gathered
Tiana Shar, the controller for Caesar Glassware Company, is in the process of analyzing the overhead costs for the month of November. She has gathered the following data for the month.
LaborDirect-labor hours:Job 573,500Job 583,000Job 592,000Labor costs:Direct-labor wages$204,000Indirect-labor wages16,000Supervisory salaries6,500MaterialInventories, November 1:Raw material and supplies$11,000Work in process (job 57)53,000Finished goods113,000Purchases of raw material and supplies:Raw material$133,000Supplies (indirect material)16,000Direct material and supplies requisitioned for production:Job 57$45,000Job 5837,500Job 5925,500Supplies (indirect material)13,000Total$121,000OtherBuilding occupancy costs (heat, light, depreciation, etc.)Factory facilities$6,600Sales offices1,600Administrative offices1,000Total$9,200Production equipment costs:Power$$4,100Repairs and maintenance1,500Depreciation1,500Other1,000Total$8,100
The firm's job-order costing system uses direct-labor hours (measured at practical capacity) as the cost driver for overhead application. In December of the preceding year, Shar had prepared the following budget for direct-labor and manufacturing-overhead costs for the current year. The plant is theoretically capable of operating at 150,000 direct-labor hours per year. However, Shar estimates that the practical capacity is 120,000 hours in a typical year.
Manufacturing Overhead
Direct-Labor HoursVariableFixed100,000$326,000$216,000120,000392,400216,000140,000455,000216,000
During November the following jobs were completed:
Job 5710 oz. water glassesJob 585 oz. juice glasses
Assist Shar by making the following calculations.
1. Calculate the predetermined overhead rate for the entire year.
2. Calculate the total cost of job 57.
3. Compute the amount of manufacturing overhead applied to job 59 during November.
4. What was the total amount of manufacturing overhead applied during November?
5. Compute the actual manufacturing overhead incurred during November.
6. Calculate the overapplied or underapplied overhead for November.
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