Exercise 7-27 Predetermined Overhead Rates (LO 7-3) AspenCompany estimates its manufacturing overhead to be $540,000 and itsdirect labor costs to be $450,000 for year 2. Aspen worked on threejobs for the year. Job 2-1, which was sold during year 2, hadactual direct labor costs of $150,000. Job 2-2, which wascompleted, but not sold at the end of the year, had actual directlabor costs of $275,000. Job 2-3, which is still in work-in-processinventory, had actual direct labor costs of $100,000. Actualmanufacturing overhead for year 2 was $600,000. Manufacturingoverhead is applied on the basis of direct labor costs.
Required:
(a) How much overhead was applied to each job in year 2?
(b) What was the over- or underapplied manufacturing overhead foryear 2?
Exercise 7-27 Predetermined Overhead Rates (LO 7-3) AspenCompany estimates its manufacturing overhead to be $540,000 and itsdirect labor costs to be $450,000 for year 2. Aspen worked on threejobs for the year. Job 2-1, which was sold during year 2, hadactual direct labor costs of $150,000. Job 2-2, which wascompleted, but not sold at the end of the year, had actual directlabor costs of $275,000. Job 2-3, which is still in work-in-processinventory, had actual direct labor costs of $100,000. Actualmanufacturing overhead for year 2 was $600,000. Manufacturingoverhead is applied on the basis of direct labor costs.
Required:
(a) How much overhead was applied to each job in year 2?
(b) | What was the over- or underapplied manufacturing overhead foryear 2? |