Question 2 Sunland uses a job costing system for all its advertising projects. Since the advertising agency is a labour-intensive business, Sunland set a policy to allocate/apply overhead costs to each job (advertisement) based on labour hours. On January 1, 2012 Sunland estimated its 2012 total overhead costs to be $136,500, and also estimated the total labour hours to be 6,500 hours for 2012. By December 31, 2012, Sunland had incurred and accumulated $137,080 actual total overhead costs and 5,980 actual labour hours worked (at $45/hr). The following are a list of four advertisements completed during 2012. Work schedule Material costs Labour hours Job #1501 Jan - May $63,300 1,780 Job #1502 Job #1503 March June Aug - Oct $29,700 $45,700 1,250 1,630 Job #1504 Sep - Dec $53,300 1,320 What is the budgeted overhead rate? Budgeted overhead rate /hr What is the cost for Job# 1502 on June 30? Cost for Job# 1502 Compute the ending balance in the total overhead account. Ending balance in the total overhead account Was overhead underapplied or overapplied? Overhead Prepare the journal entry to close the overhead account. Assume that the underapplied and overapplied overhead was not material. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry Required" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit A client would like to get a quote for an advertising project before she decides to have her advertisement done by Sunland. The cost accountant estimates that the project would take 980 labour hours and $48,300 of material costs. What is the cost of this job? Cost of the job If Sunland's mark-up percentage is 50% of its full costs (i.e., add 50% of profit on its full cost), what is the quote that Sunland should give to this client? Quote $ Question 2 Sunland uses a job costing system for all its advertising projects. Since the advertising agency is a labour-intensive business, Sunland set a policy to allocate/apply overhead costs to each job (advertisement) based on labour hours. On January 1, 2012 Sunland estimated its 2012 total overhead costs to be $136,500, and also estimated the total labour hours to be 6,500 hours for 2012. By December 31, 2012, Sunland had incurred and accumulated $137,080 actual total overhead costs and 5,980 actual labour hours worked (at $45/hr). The following are a list of four advertisements completed during 2012. Work schedule Material costs Labour hours Job #1501 Jan - May $63,300 1,780 Job #1502 Job #1503 March June Aug - Oct $29,700 $45,700 1,250 1,630 Job #1504 Sep - Dec $53,300 1,320 What is the budgeted overhead rate? Budgeted overhead rate /hr What is the cost for Job# 1502 on June 30? Cost for Job# 1502 Compute the ending balance in the total overhead account. Ending balance in the total overhead account Was overhead underapplied or overapplied? Overhead Prepare the journal entry to close the overhead account. Assume that the underapplied and overapplied overhead was not material. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry Required" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit A client would like to get a quote for an advertising project before she decides to have her advertisement done by Sunland. The cost accountant estimates that the project would take 980 labour hours and $48,300 of material costs. What is the cost of this job? Cost of the job If Sunland's mark-up percentage is 50% of its full costs (i.e., add 50% of profit on its full cost), what is the quote that Sunland should give to this client? Quote $
