Chapter 27 – Job Order Cost Accounting
58. Wilson Enterprises applies overhead based on direct labor cost. The company estimates
that their overhead for the year will be $240,000, and direct labor cost to be $300,000. Actual
direct labor cost for Martinez Manufacturing was $280,000 and actual overhead costs were
$220,000. At the end of the year, manufacturing overhead was:
59. At the end of the year the Manufacturing Overhead account is closed into what account?
60. At the end of the year, Harding Company had a balance in Manufacturing Overhead of
$19,000, and a balance in Manufacturing Overhead Applied of $20,000. When the
Manufacturing Overhead account is closed, the Cost of Goods Sold account will be:
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64. Millenium Manufacturing is considering two methods for applying overhead. Estimated
data for the next year, 2013, follows.
1. What would be the overhead application rate based on direct labor costs?
2. What would be the overhead application rate based on direct labor hours?
3. If a job requires 650 hours of direct labor, what would be the amount of overhead applied
to the job using the rate based on direct labor hours?
65. During the year, a firm’s direct labor costs were $95,000. The firm applies overhead at the
rate of 75 percent of direct labor costs. The firm’s actual overhead costs for the year were
$72,315.
1. What was the amount of overhead applied?
2. Did the firm have overapplied or underapplied overhead for the year?
3. What amount was overapplied or underapplied?
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