a

Kansas Company uses a job costing accounting system for itsproduction costs. The company uses a predetermined overhead ratebased on direct labor-hours to apply overhead to individual jobs.The company prepared an estimate of overhead costs at differentvolumes for the current year as follows:

Direct labor-hours		150,000			180,000			210,000
Variable overhead costs	$	1,050,000		$	1,260,000		$	1,470,000
Fixed overhead costs		594,000			594,000			594,000
Total overhead	$	1,644,000		$	1,854,000		$	2,064,000

The expected volume is 180,000 direct labor-hours for the entireyear. The following information is for March, when Jobs 6023 and6024 were completed:

Inventories, March 1
Materials and supplies	$	32,500
Work?in?process (Job 6023)	$	167,000
Finished goods	$	342,000
Purchases of materials andsupplies
Materials	$	411,000
Supplies	$	43,000
Materials and suppliesrequisitioned for production
Job 6023	$	136,000
Job 6024		122,500
Job 6025		72,000
Supplies		18,000
	$	348,500

Factory direct labor-hours(DLH)
Job 6023	10,000 DLH
Job 6024	8,500 DLH
Job 6025	6,000 DLH

  

Labor costs
Direct labor wages (all hours @$7)	$	171,500
Indirect labor wages (12,000hours)		54,000
Supervisory salaries		113,000
Building occupancy costs (heat,light, depreciation, etc.)
Factory facilities	$	20,000
Sales and administrativeoffices		7,500
Factory equipment costs
Power		10,000
Repairs and maintenance		3,500
Other		7,500
	$	21,000

  

(Note: Regardless of your answer to requirementa, assume that the predetermined overhead rate is $10 perdirect labor-hour. Use this amount in answering requirementsb through e.)

  

Required:

a. Compute the predetermined overhead rate(combined fixed and variable) to be used to apply overhead toindividual jobs during the year. (Round your answer to 2decimal places.)

b. Compute the total cost of Job 6023 when itis finished.

  

c. How much of factory overhead cost wasapplied to Job 6025 during March?

  

d. What total amount of overhead was applied tojobs during March?

  

e. Compute actual factory overhead incurredduring March.

  

  

f. At the end of the year, Kansas Company hadthe following account balances:

  

Overapplied overhead	$	5,000
Cost of goods sold		2,930,000
Work-in-process inventory		122,000
Finished goods inventory		237,000

  

Assuming that the overapplied overhead is not material, show thenew account balances in the following table.