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. Designer-hours Direct materials Direct labor Project Williams Chandler Nguyen 330 210 250 $6,100 $3,100 $4,900 $3,700 $2,300 $2,800 Actual overhead costs were $36,000 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 $58 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. Williams Chandler Nguyen Overhead cost

Answer 1

1) Overhead cost applied

	Williams	Chandler	Nguyen
Overhead cost applied	330*58 = 19140	210*58 = 12180	250*58 = 14500

2) Job Cost sheet

	Williams	Chandler	Nguyen
Direct material	6100	3100	4900
Direct labor	3700	2300	2800
Overhead	19140	12180	14500
Total	28940	17580	22200

Cost of goods manufactured = 28940+17580 = 46520

3) Work in process = $22200

4) Applied overhead = 19140+12180+14500 = 45820

Actual overhead = 36000

Over applied overhead = 45820-36000 = 9820