1. During February Cardella Manufacturing works on two jobs: A16 and B17. Sum

1. During February Cardella Manufacturing works on two jobs: A16 and B17. Summary data concerning these jobs are as follows.

Manufacturing Overhead

Cardella Manufacturing uses a predetermined overhead rate with direct labor costs as the activity base. It expects annual overhead costs to be $760000 and
direct labor costs for the year to be $950000.

Manufacturing Costs Incurred

Purchased $54000 of raw materials on account.

F actory labor $76000 plus $4000 employer payroll taxes.

Manufacturing overhead exclusive of indirect materials and indirect labor $59800.

Assignment of Costs

Direct materials:

Job A16 $27000 Job B17 $21000

Indirect materials:

$3000

Direct labor:

Job A16 $52000 Job B17 $26000

Indirect labor:

$2000

Job A16 was completed and sold on account for $150000. Job B17 was only partially

completed.

Instructions

(a) Compute the predetermined overhead rate.

(b) Journalize the February transactions in the sequence followed in the chapter.

(c) What was the amount of under- or overapplied manufacturing overhead?