Job costing and overhead application
Uniflex applies overhead on the basis of direct labor cost. In December 20X4, the company's cost accountant made the following predictions for 20X5 operations: direct labor cost, $680,000; factory overhead, $961,000.
Uniflex worked on job Nos. 241 and 242 in January. The costs incurred and production status of these two jobs appear in the table that follows.
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Job No. 241
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Job No. 242
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Direct materials
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$32,000
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$47,000
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Direct labor
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18,000
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33,000
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Production status
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In process
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In process
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By the end of 20X5, actual direct labor cost amounted to $612,500, and factory overhead incurred totaled $847,500. There was no work in process on January 1, 20X5.
Compute the following:
1. Uniflex's overhead application rate (This rate needs to be recalculated because the labor has changed)
2. The balance of the Work in Process account on January 31, 20X5.
3. The amount of over- or underapplied overhead for 20X5. Be sure to indicate whether overhead was overapplied or underapplied.