Question;ABC company uses a job-order costing;system. Direct materials and direct labor are traced to jobs. Manufacturing;overhead is applied to jobs on the basis of machine hours. At the start of the;year they had budgeted for overhead to be $316,000 and they planned to use;4,000 machine hours.;In November, job #JK150 was completed.;Materials used on job #JK 150 totaled $5,700 and the labor cost was $6,300. Job;#JK 150 had used 120 machine hours.;At the end of the year it was determined;that the company had incurred $320,000 of manufacturing overhead and that they;had worked 4,100 machine hours.;1.;Prepare the journal entry to;transfer the cost of job #JK150 out of the work-in-process account at the end;of November;2.;What was the under-or over;recovered overhead for the year?;3.;How would the under or over;recovered overhead be treated at the end of the year?;4.;Why would they have chosen;machine hours as the basis for their predetermined overhead recovery rate?
Paper#37240 | Written in 18-Jul-2015Price : $22