Martha’s Interiors, an interior decorating firm, uses a job order costing system and applies overhead to jobs using a predetermined rate of 60 percent of direct labor cost. At the beginning of June 2002, Job #918 was the only job in process. Costs of Job #918 included direct material of $16,500, direct labor of $2,400, and applied overhead of $1,440. During June, the company began work on Jobs #919, #920, and #921 and purchased and issued $34,700 of direct material. Direct labor cost for the month totaled $12,600. Job #920 had not been completed at the end of June, and its direct material and direct labor charges were $6,700 and $1,300, respectively. All the other jobs were completed in June.
a. What was the total cost of Job #920 as of the end of June 2002?
b. What was the cost of goods manufactured for June 2002?
c. If actual overhead for June was $8,700, was the overhead underapplied or overapplied for the month? By how much?
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