Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 6

Application of Overhead The following information applies to the O'Donnell Company for March production. There are only two jobs (X and Y) in production in March.
a. Purchased direct materials and indirect materials with the following summary of receiving reports:

b. Issued direct materials and indirect materials with this summary of requisitions:

c. Factory labor incurred is summarized by these time tickets:

d. Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows:

e. Factory overhead costs were applied to jobs at the predetermined rate of $46 per machine hour. Job X incurred 1,100 machine hours; Job Y used 800 machine hours.
f. Job X was completed; Job Y was still in process at the end of March.
The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March.
Required
1. Calculate the total manufacturing cost for Job X and Job Y for March.
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.