Answer:
Part 1
$9.60
Part 2
$11,129
Part 3
Journal 1
Debit : Overheads $172,500
Credit : Equipment lease $ 6,800
Credit : Depreciation on building 19,340
Credit : Indirect labor 90,400
Credit : Utilities 14,560
Credit : Other overhead 41,400
<em>Being overheads incurred</em>
Journal 2
Debit : Work In Process $173,760
Credit : Overheads $173,760
<em>Being overheads applied</em>
Part 4
under-applied overheads is $1,260
Part 5
$636,860
Explanation:
Overhead rate = Budgeted Overheads ÷ Budgeted Activity
= $129,600 ÷ 13,500
= $9.60
Total cost (Job K456) = $2,750 + $5,355 + $3,024 = $11,129
Actual Overheads = $ 6,800 + $19,340 + $90,400 + $14,560 + $41,400 = $172,500
Applied overheads = 18,100 x $9.60 = $173,760
Since, Actual Overheads < Applied overheads, overheads have been under-applied. Amount of under-applied overheads is $1,260 ($173,760 - $172,500)
Under-applied overheads are added to cost of goods sold. Therefore, adjusted cost of goods sold will be $636,860 ($635,600 + $1,260)
