Question

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

```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
\$169,000 during 2019.

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

 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