Heathcote Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year:
Results of operations:

-The adjusted Cost of Goods Sold for the year is:
A) $1,603,000
B) $1,458,000
C) $1,453,000
D) $1,463,000

Question

Heathcote Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year:
  Results of operations:
 
-The adjusted Cost of Goods Sold for the year is:
A) $1,603,000 
B) $1,458,000 
C) $1,453,000 
D) $1,463,000

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base
= $546,000 ÷ 42,000 direct labor-hours = $13.00 per direct labor-hour
Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred
= $13.00 per direct labor-hour × 47,000 direct labor-hours = $611,000
 11ea7761_18f0_f97b_81a5_5795760bf48f_TB2580_00 11ea7761_18f0_f97c_81a5_b51bf258136f_TB2580_00

Heathcote Corporation Is a Manufacturer That Uses Job-Order Costing