P4-18 Heritage Gardens provides complete garden designs 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.
Williams Chandler Nguyen
Designer Hours…………… 200 80 120
Direct Materials…………….. $ 4,800 $ 1,800 $3,600
Direct labor……………………. $ 2,400 $ 1,000 1,500
Actual overhead costs were $16,000 for May. Overhead costs are applied to projects on the basis of designer-hours became most of the overhead is related to the costs of the garden design s studio. The predetermined overhead rate is $45 per designer-hour. The William and Chandler projects were completed in May.
1. Compute the amount of overhead cost that would have been applied to each project during Ma.
2. Determine the cost of goods manufactured for May.
3. What is the accumulated cost of the work in process at the end of the month?
4. Determine the underapplied or Overapplied Overhead for May.
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