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Script Company uses a
The expected volume is 24,000 direct labor-hours for the entire year. The following information is for October, when jobs 1011 and 1015 were completed:
Required
Answer the following questions:
- a.     Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. (Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $100 per direct labor-hour. Use this amount in answering requirements [b] through [e].)
- b.     Compute the total cost of Job 1011 when it is finished.
- c.      How much of
factory overhead cost was applied to Job 1017 during October? - d.     What total amount of overhead was applied to jobs during October?
- e.      Compute actual factory overhead incurred during October.
- f.       At the end of the year, Script Company had the following account balances:
How would you recommend treating the underapplied overhead? Show the effect on the account balances in the following table:
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