QUESTION 21Preston Manufacturing is working on two housing projects. Overhead is applied on the basis of direct labor hours. At the beginning of the year, the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period: (a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours).(c) Project II was sold during the period for $120,000.The amount of estimated overhead applied to work in process inventory for the period equals: (Do not round your intermediate calculation.) $51,200. $64,000. $44,000. $54,400.

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Description: QUESTION 21Preston Manufacturing is working on two housing projects. Overhead is applied on the basis of direct labor hours. At the beginning of the year, the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be wor

Overhead application rate = Estimated overhead / Estimated Direct labor hours = $64,000 / 10,000…

Answered: Preston Manufacturing is working on two…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter4: Job-order Costing And Overhead Application

Section: Chapter Questions

Problem 62P: (Appendix 4A) Overhead Application, Journal Entries, Job Cost At the beginning of the year, Smith...

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QUESTION 21

Preston Manufacturing is working on two housing projects. Overhead is applied on the basis of direct labor hours. At the beginning of the year, the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period:
(a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.

(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours).

(c) Project II was sold during the period for $120,000.
The amount of estimated overhead applied to work in process inventory for the period equals: (Do not round your intermediate calculation.)

$51,200.

$64,000.

$44,000.

$54,400.

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