Elvis Industries uses a job-order cost system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor hours. The estimated manufacturing overhead cost was $132,000for the year and the estimated direct labor hours were 16,000 hours.
In June Job #325 was completed. Direct materials totaled $5,600. Total labor costs were $4,800 at $10 per hour.
At the end of the year it was determined that the company worked 15,000 direct labor hours for the year and incurred $135,000 in actual manufacturing overhead costs.
1. Calculate the predetermined overhead rate for the year.
2. Determine the amount of overhead charged to jobs during the year.
3. Determine the amount of under- or over-applied overhead for the year.
4. Prepare a job cost sheet for Job #325 using the information given. Assuming that 80 units were completed, determine the unit product cost.