Answer:
$ 7,248
Explanation:
Prorating:
Before Rate
WIP 14,670 14,670/30,000 = 0.489
FInished Goods 0
COGS 15,330 15,330 / 30,000 = .511
Total 30,000
Allocation of overapplied overhead to WIP
1,200 x 0.489 = $ 586.8
Allocation to Job #58
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Overhead Job #58: Total cost:
Materials 6,470
18 hours x $20 = 360 labor cost
360 labor cost x 200% overhead rate = 720 applied overhead
Total cost (before prorating): 7,550
586.8/14,670 x 7,550 = 302
<u>Adjusted balance:</u>
Materials 6,470
Labor cost: 360
Overhead: 720 - 302 = 418
Total 7,248
We subtract as the overhead was overapplied, we capitalzie more cost than we should.
