Reference no: EM132501925

Wells Corporation, which uses a job-costing system, had two jobs in process at the start of February 2019: Job no. C6 with a cost of $105,000 and job no. D1 with a cost of $25,000. The following information is available:

1. The company applies manufacturing overhead on the basis of machine hours. Budgeted overhead and machine activity for the year were anticipated to be $3,264,000 and 102,000 hours, respectively.
2. The company worked on four jobs during February. Direct materials used, direct labor incurred, and machine hours consumed were:

Job No.                    Direct Material                  Direct Labor                      Machine Hours

C6                               152,000                   127,000                          1,600

D1                               179,000                      103,000                          2,500

D2                                  212,000                    135,000                        2,000

D3                                 70,000                            85,000                    1,500

• Manufacturing overhead during February included charges for depreciation ($52,000), indirect labor ($100,000), indirect materials used ($38,000), and other factory costs ($48,000).
• Wells completed job no. C6 and job no. D1. Job no. C6 was sold for cash, producing a gross profit of $142,600 for the firm.

Required:

Question 1. Compute the company's predetermined overhead application rate. State it in terms of cost per machine hour.

Question 2. Compute Total Manufacturing costs (use applied overhead - not actual overhead).

Question 3. Compute the (unadjusted) Cost of Goods Sold.

Question 4. Compute the Cost of Goods Manufactured (use applied overhead - not actual overhead).

Question 5. Compute the cost of Ending Work-in-Process Inventory (use applied overhead - not actual overhead).

Question 6. Compute (and identify) the amount of over- or under-applied overhead.