Question

Jackson Company applies overhead to products using a pre
determined rate of $12.10 per direct labor hour.

During 2019, Jackson Company began work on three jobs.
Information relating to these three jobs appears below:

                           Job #359   Job #360   Job #361
direct materials .......    $98,000    $75,000    $91,000
direct labor cost ......    $95,200    $79,900    $69,700
direct labor hours .....      5,600      4,700      4,100

By the end of 2019, job #359 and job #361 had been completed.
Job #360 was not completed by the end of 2019. Additionally,
by the end of 2019, job #361 had been sold while job #359 was
not sold. Jackson Company had total actual overhead cost of
$169,000 during 2019.

Calculate the cost of goods sold reported by Jackson Company
for 2019 after the overhead variance has been closed.

Answer 1

Answer:
Given, Job # 359 Completed by end of 2019
Manufacturing Overhead applied to Job # 359      = Pre -determined rate x Direct Labor Hours      = $ 12.10 x 5,600 DLH	$ 67,760
Applied Overhead    = Pre -determined rate x Total Direct Labor Hours    = $ 12.10 x ( 5,600 + 4,700 + 4,100)    = $ 12.10 x 14,400	$ 174,240
Under / Over Applied Overhead    = Actual overhead (-) Applied Overhead    = $ 169,000 (-) $ $ 174,240	$ 5,240 (OverApplied)
Particulars	Amount
Direct material	$ 98,000
Direct labour	$ 95,200
Manufacturing Overhead applied	$ 67,760
Less: Over Applied Overhead	($ 5,240)
Cost of goods sold after the overhead variance has been closed	$ 255,720