UCD Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labor-hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows:

Direct labor-hours		30,000		40,400		51,100
Variable overhead costs	$	360,000	$	484,800	$	613,200
Fixed overhead costs		501,600		501,600		501,600
Total overhead	$	861,600	$	986,400	$	1,114,800

The expected volume is 40,400 direct labor-hours for the entire year. The following information is for October, when jobs 1011 and 1015 were completed.

Inventories, October 1
Raw materials and supplies	$ 42,800
Work in process (Job 1011)	92,500
Finished goods	228,900
Purchases of raw materials and supplies
Raw materials	629,200
Supplies	81,000
Materials and supplies requisitioned for production
Job 1011	279,600
Job 1015	234,300
Job 1017	45,500
Supplies	76,000
	$635,400
Machine-hours (MH)
Job 1011	6,200 MH
Job 1015	6,102 MH
Job 1017	3,720 MH
Direct labor-hours (DLH)
Job 1011	14,030 DLH
Job 1015	6,130 DLH
Job 1017	3,790 DLH
Labor costs
Direct labor wages (all hours @ $14)	$335,300
Indirect labor wages (12,200 hours)	64,050
Supervisory salaries	126,300
Building occupancy costs (heat, light, depreciation, etc.)
Factory facilities	35,800
Sales and administrative offices	14,130
Factory equipment costs
Power	21,710
Repairs and maintenance	8,150
Other	9,750
	$ 39,610

(Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $24.92 per direct labor-hour. Use this amount in answering requirements [b] through [e].)

Required:

(a)	Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. (Round your intermediate computations and final answers to nearest whole dollar value.)

(b)	Compute the total cost of Job 1011 when it is finished. (Round your intermediate computations and final answers to nearest whole dollar value.)

(c)	How much of factory overhead cost was applied to Job 1017 during October? (Round your intermediate computations and final answers to nearest whole dollar value.)

(d)	What total amount of overhead was applied to jobs during October? (Round your intermediate computations and final answers to nearest whole dollar value.)

(e)	Compute actual factory overhead incurred during October.

10_24_2012

(f)	At the end of the year, UCD Company had the following account balances: (Leave no cells blank - be certain to enter "0" wherever required.)

		Balance
Underapplied Overhead	$	4,400,000
Cost of Goods Sold		3,080,000
Work-in-Process Inventory		440,000
Finished Goods Inventory		880,000

How would you recommend treating the underapplied overhead? Show the effect on the account balances in the following table: