Greenlaw Products uses job order costing and applies overhead to products using direct labor hours. Greenlaw has determined that their predetermined overhead is $4.00 per direct labor hour when an estimated 200,000 direct labor hours are incurred
During 2011 Greenlaw actually incurred a total of 215,000 direct labor hours and actual overhead costs ended up being $900,000. Greenlaw has no ending work-in-process or finished goods inventories. Required: A. What were Greenlaw's estimated total overhead costs for the year? B. By how much was overhead over- or underapplied? C. Assuming that cost of goods sold was $3,000,000 prior to the adjustment for over- or underapplied overhead, what will be the cost of goods sold amount after the year-end adjustment?
A. $800,000 calculated as follows: $4.00 = X ΒΈ 200,000; X = $800,000
B. Underapplied by $40,000 [$900,000 - (215,000 hours x $4)]
C. $3,040,000 ($3,000,000 + $40,000 underapplied = $3,040,000)
You might also like to view...
In which of the two forms of payment does the exporter not give up control of the merchandise until paid: a documents against payment collection or a documents against acceptance collection?
What will be an ideal response?
Senior management must remain committed to the project through every phase and must show their commitment
Indicate whether the statement is true or false