Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 32

Application of Overhead The following information is for Punta Company for July 2013:
a. Applied factory overhead costs to jobs at the predetermined rate of $42.50 per labor-hour. Job S incurred 6,175 labor-hours; Job T used 4,275 labor-hours.
b. Shipped Job S to customers during July. Job S had a gross margin of 24% based on manufacturing cost.
c. Job T was still in process at the end of July.
d. Closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of July.
e. Factory utilities, factory depreciation, and factory insurance incurred are summarized as follows:

f. Direct materials and indirect materials used are as follows:

g. Factory labor incurred for the two jobs and indirect labor are as follows:

Required
1. Calculate the total manufacturing cost for Job S and Job T for July 2013.
2. Calculate the amount of overapplied or underapplied overhead and state whether the Cost of Goods Sold account will be increased or decreased by the adjustment.