Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on...
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Accounting
Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished.
September 1, inventories:
Materials
$9,000
Work-in-process (All Job X)
37,400
Finished goods
80,400
Materials purchases
$125,000
Direct materials requisitioned:
Job X
$54,500
Job Y
40,000
Direct labor hours:
Job X
5,000
Job Y
4,500
Labor costs incurred:
Direct labor ($6.00 per hour)
$57,000
Indirect labor
16,200
Factory supervisory salaries
7,200
Rental costs:
Factory
$8,400
Administrative offices
2,200
Total equipment depreciation costs:
Factory
$9,000
Administrative offices
1,900
Indirect materials used
$14,400
The underapplied or overapplied overhead for September is:
$2,750 underapplied.
$2,750 overapplied.
$920 overapplied.
$920 underapplied.
$1,450 underapplied.
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