McGorry Applies Overhead to Production at a Predetermined Rate of 75

Essay

McGorry applies overhead to production at a predetermined rate of 75%, based on direct labor cost. Job 1000, the only job still in process at the end of June, has been charged with direct labor of $30,000. McGory's Manufacturing Overhead account showed a credit balance of $10,000 at the end of February 2007.
Required:
(a) Calculate the amount of direct materials charged to Job 1000.
(b) Compute the actual overhead for February 2007.
(c) Assume that McGory closes its Manufacturing Overhead account each month. McGory does not prorate the manufacturing overhead variance. Prepare the entry to close the overhead account at the end of February, 2007.
McGorry Furniture Company uses a job-order cost system. The following debits (credits) appeared in the Work-in-Process account for February 2007: