Assignment task: At the beginning of the year, Smith Company budgeted of $129,600 as well as 13,500 direct labor hours.
During the year, Job K456 was completed with the following information: direct materials cost, $2,750; direct labor costs $5,355. The average wage for Smith Company employee is $17 per hour.
By the end of the year, 18,100 direct labor hours had actually been worked, and Smith incurred the following actual overhead costs for the year:
Equipment lease $ 6,800
Depreciation on building 19,340
Indirect labor 90,400
Utilities 14,560
Other overhead 41,400
1. Calculate the overhead rate for the year.
2. Calculate the total cost of Job K456.
3. Prepare the journal entries to record actual overhead and to apply overhead to production for the year.
4. Is overhead overapplied or underapplied? By how much?
5. Assuming that the normal cost of goods sold for the year is $635,600, what is the adjusted cost of goods sold?