Question
Yellow Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year, manufacturing
Yellow Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year, manufacturing overhead costs and direct labor-hours were estimated at RM80,000 and 16,000 hours respectively, for the year. In June, Job #215 was completed. Materials costs on the job totaled RM1,500 and labor costs totaled RM2,400 at RM6 per hour. At the end of the year, it was determined that the company worked 15,000 direct labor-hours for the year, and incurred RM78,000 in actual manufacturing overhead costs. Required: (i) determine the predetermined overhead rate for the year. (1 mark) (ii) determine the amount of overhead charged to jobs during the year. (1 mark) (iii) determine the amount of underapplied or overapplied overhead for the year. (3 marks) (iv) assuming that 100 units were completed, determine the total cost that would appear on the job cost sheet for Job #215. (4 marks) TOTAL 15 MARK
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