Reference no: EM133051542

Questions -

Q1. AJ Corporation manufactures tables. The entity also does contract work for other customers and utilizes a job order costing system. The flexible budget covering next years' expected range of activity is:

Direct Labor Hours 50,000 80,000 110,000

Machine Hours 40,000 64,000 88,000

Variable Overhead Costs $ 100,000 $ 160,000 $ 220,000

Fixed Overhead Costs 150,000 150,000 150,000

Total Overhead Costs $ 250,000 $ 310,000 $ 370,000

A predetermined overhead rate is based on direct labor hours is used to apply total overhead. Management has estimated that 100,000 direct labor hours will be used next year. At the end of the year, actual direct labor hours for the year were 112,375 hours and the actual manufacturing overhead for the year was $412,525. What amount is the over/underapplied FOH?

2. Sara Corporation has 3 producing departments - Cutting, Sewing and Finishing. In November, the Sewing department transferred 6,200 units to Finishing and had 400 units in process at the end of the month. The Sewing department work in process inventory as of October 31 were 1,200 units. These units were 1/4 incomplete as of that date, with a cost of $13,312. Out of this total amount, 40% was materials cost, while the cost of labor was 1/3 of conversion cost. The units started in the Sewing department during November were received from the preceding department at a cost of $47,595.60. For the same month, the sewing department incurred $11,772 for materials, $15,660 for labor and $2,268 for overhead. As of the end of the month, the department has done one quarter of the work required to complete the units in process. How much is the cost of units transferred to the Finishing department?