Reference no: EM131798122

Problem - Birmingham Bowling Ball Company (BBBC) uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 20x3, consisted of one job (no. 3088), which was carried on the year-end balance sheet at $78,400. There was no finished-goods inventory on this date.

BBBC applies manufacturing overhead to production on the basis of direct-labor cost. Budgeted totals for 20x4 for direct labor and manufacturing overhead are $2,100,000 and $2,730,000, respectively.

Actual results for the year follow.

Job no. 3088 was completed in January 20x4; there was no work in process at year-end. All jobs produced during 20x4 were sold with the exception of job no. 3154, which contained direct-material costs of $78,000 and direct-labor charges of $42,500. BBBC charges any under- or overapplied overhead to Determine the company's predetermined overhead application rate.

Information Needed:
Direct material	$2,800,000.00
Direct labor	$2,175,000.00
Indirect material	$32,500.00
Indirect labo	$1,430,000.00
Factory depreciation	$870,000.00
Factory insurance	$29,500.00
Factory utilities	$415,000.00
Selling and administrative expenses	$1,080,000.00
Total	$8,832,000