Question

Moody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Machine-hours required to support estimated production		158,000
Total estimated manufacturing overhead cost	$	1,406,200

Required:

1.	Compute the predetermined overhead rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
	Predetermined Overhead Rate: _________

   

2.	During the year, Job 400 was started and completed. The following information was available with respect to this job:

Total Manufacturing cost: _________

Direct materials requisitioned	$	360
Direct labor cost	$	200
Machine-hours used		32

	Compute the total manufacturing cost assigned to Job 400. (Do not round intermediate calculations and round final answer to 2 decimal places.)

     

  

3-a.	During the year the company worked a total of 145,000 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,294,500. What is the amount of underapplied or overapplied overhead for the year? (Use the overhead rate determined in requirement 1.)
	Manufacturing overhead cost underapplied by : ___________

       

3-b.	If this amount were closed out entirely to Cost of Goods Sold, would net operating income increase or decrease?
	Increase Decrease

Answer 1