Value Premium performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups to review foods, cleaning products, and toiletries. Value Premium uses a normal-costing system with one direct-cost pool, labor, and one indirect-cost pool, general overhead. General overhead is allocated to each job based on 180% of direct labor cost. Actual overhead equaled allocated overhead as of April 30, 2017. Actual overhead in May was $154,520. (Click the icon for additional information about Value Premium.) iMore Info All costs incurred during the planning stage for a market research job and during the job are gathered in a balance sheet account called "Jobs in Progress (JIP)." When a job is completed, the costs are transferred to an income statement account called "Cost of Completed Jobs (CCJ)." Following is cost information for May 2017: (Click the icon to view the cost information for May 2017.) As of May 1, there were two jobs in progress: Munchy Candy Bars, and Glitter Toothpaste. The jobs for Cruda Organic Salsa and Zest Dish Liquid were started during May. The jobs for Munchy Candy Bars and Zest Dish Liquid were completed during May. Read the requirements. Data Table - From Beginning JIP Incurred in May General Overhead Band Labor Allocated Labor Munchy Candy Bars $ 37,220 $ 24,000 $ 19,000 Glitter Toothpaste 5,860 5,000 35,000 Cruda Organic Salsa 22,300 Zest Dish Liquid 5,100 Requirements 1. Calculate JIP at the end of May. 2. Calculate CCJ for May. 3. Calculate under- or overallocated overhead at the end of May. 4. Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows: a. Written off to CCJ b. Prorated based on the ending balances (before proration) in JIP and CCJ c. Prorated based on the overhead allocated in May in the ending balances of JIP and CCJ (before proration) 5. Which method would you choose? Explain. Would your choice depend on whether overhead cost is underallocated or overallocated? Explain. Requirement 1. Calculate JIP at the end of May. Job Glitter Toothpaste Cruda Organic Salsa Total Nice work! Requirement 2. Calculate CCJ for May. GA Balance at the end of May 108,860 62,440 171,300 Balance at the Job end of May Munchy Candy Bars $ 114,420 Zest Dish Liquid 14,280 $ 128,700 Total Well done! Requirement 3. Calculate under- or overallocated overhead at the end of May. Overhead is underallocated Nice work! by S 8,000 at the end of May. Requirement 4a. Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows: Written off to CCJ. (If a box is not used in the table, leave the box empty; do not enter a zero.) Account balance Under-Overallocated Account balance (before adjustment) overhead written off (after adjustment) JIP 171,300 171,300 CCJ 128,700 8,000 136,700 300,000 $ 8,000 $ 308,000 Fantastic! Requirement 4b. Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows: Prorated based on the ending balances (before proration) in JIP and CCJ. (Round intermediary calculations to three decimal places, XXX or to the nearest tenth percent, XX%. Round the amount you input in the cell to the nearest dollar.) JIP CCJ Account balance Proration of Under- Account balance (before adjustment) overallocated overhead (after adjustment) 171,300 $ 4,568 175,868 128,700 3,432 132,132 300,000 $ 8,000 $ 308,000 Requirement 4c. Calculate the ending balances in JIP and CCJ if the under- or overallocated overhead amount is as follows: Prorated based on the overhead allocated in May in the ending balances of JIP and CCJ (before proration). (Round intermediary calculations to three decimal places, XXX or to the nearest tenth percent, XX%. Round the amount you input in the cell to the nearest dollar.) Account balance Proration of Under- Account balance (before adjustment) overallocated overhead (after adjustment) JIP 25 171,300 $ 5,632 $ 176,932 CCJ 128,700 2,368 131,068 300,000 $ 8,000 $ 308,000