Reference no: EM132778512

Hooper Manufacturing Company employs a job-order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:

Direct materials requisitioned during the month:

Job 56 $11,000
Job 57 5,000
Job 58 12,000
$28,000

Direct labour incurred and charged to jobs during the month was:

Job 56 $21,000
Job 57 15,000
Job 58 10,000
$46,000

1. Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 75% of direct labour costs.
2. Actual manufacturing overhead costs incurred during the month amounted to $41,000. 
3. Job 57 consisting of 1,500 units and Job 58 consisting of 400 units were completed during the month.

Instructions

Problem 1: Prepare journal entries to record the above transactions.

Problem 2: How much manufacturing overhead was applied to Job 58 during the month?

Problem 3: Calculate the unit cost of Jobs 57 and 58.4. What is the balance in Work in Process Inventory at the end of the month?

Problem 4: Determine if manufacturing overhead was under- or over-applied during the month. By how much?