Answer Happy

7. The Moez Company uses a normal job order cost system. Other data: . There are three jobs that pass through the two production departments. . Job 401 and Job 402 were completed and sold during January. . Job 403 was not completed as of December 31, 2022. . The company considers under- or overallocated overhead immaterial. Departments Actual Overhead Actual Direct Labor Rates $ 12 per hour $15 per hour Budget Overhead Driver Rates $10 per machine hour 150% of direct labor cost Department 1 $ 45,000 $ 60,000 Department 2 Job 401 Job 402 Job 403 Total $20,000 $34,000 $11,000 $65,000 Work in Process 01/01/2022 Direct materials: Department 1 $40,000 $26,000 $50,000 $116,000 $5,000 $8,000 $12,000 $25,000 Department 2 Direct labor cost: Department 1 $9,000 $12,000 $7,000 $28,000 $11,000 $16,000 $9,000 $36,000 Department 2 Machine hours: Department 1 800 1,200 2,300 4,300 Department 2 130 250 180 560
Place the information in T accounts and answer the following questions: a. What was the total allocated overhead during 2022? b. What was the cost of work in process on December 31, 2022? c. What was the value of the cost of goods sold account before any adjustment for over- or underallocated overhead? d. What was the value of the cost of goods sold account after any adjustment for over- or underallocated overhead? e. Why would a company use machine hours to assign overhead in one department and direct labor dollars in another department? f. If the company sells the jobs at a 20% margin based on cost, what was the selling price of Job 401?