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Panda Manufacturing Inc. ends the month with two jobs still in progress. Job 5 has $10,000 of direct materials, $2,000 of direct labor and $8,000 of manufacturing overhead allocated. Job 6 was $30,000 of direct materials, $2,000 of direct labor and $10,000 of manufacturing overhead allocated. The cost of goods sold for the month was $40,000 and of that 70% of the cost of goods sold was direct costs. There were no finished goods in stock as the month ends.
Problem 1: If the manufacturing overhead is under- allocated by $10,000, which of the following choices would be the correct way to prorate it, assuming the proration is based on the allocated overhead in the ending balances of work-in-process, finished goods, and cost of goods sold? (Round the interim and final answers to the nearest integer.)
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