Question

Heritage Gardens provides complete garden design and landscaping services. The company uses a job-order costing system to track the costs of its landscaping projects. The table below provides data concerning the three landscaping projects that were in progress during May. There was no work in process at the beginning of May.   

	Project
	Williams			Chandler			Nguyen
Designer-hours		300			180			220
Direct materials	$	5,800		$	2,800		$	4,600
Direct labor	$	3,400		$	2,000		$	2,500

Actual overhead costs were $33,000 for May. Overhead costs are applied to projects on the basis of designer-hours because most of the overhead is related to the costs of the garden design studio. The predetermined overhead rate is $55 per designer-hour. The Williams and Chandler projects were completed in May; the Nguyen project was not completed by the end of the month. No other jobs were in process during May.     

Required:

1. Compute the amount of overhead cost that would have been applied to each project during May.

2. Determine the cost of goods manufactured for May.

Answer 1

1) Overhead applied

	Williams	Chandler	Nguyen	Total
Total overhead applied	300*55 = 16500	180*55 = 9900	220*55 = 12100	38500

2) Cost of goods manufactured

	Williams	Chandler
Direct material	5800	2800
Direct labor	3400	2000
Overhead	16500	9900
Total	25700	14700

Cost of goods manufactured = 25700+14700 = 40400