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Normal job costing, unit costs. (J. Watson) Pearson Ltd. uses a normal job-costing system and applies overhead on the basis of direct labour-hours. At the beginning of the year, the company estimated that total overhead costs for the year would be $180,000, and it budgeted total labour-hours of 15,000. Actual labour-hours worked for the period January 1 to November 30 were 13,750. On December 1, the company had three jobs in process: Additional Information 1. The balance in the Overhead Control account on December 1 was $195,010. 2. There were no jobs in Finished Goods as of December 1. 3. Jobs 815, 822, 823, and 824 were completed during December. 4. Job 824 is the only job in Finished Goods as of December 31. 5. The company's pricing policy is 200% of total manufacturing cost. Required 1. Calculate the budgeted overhead rate used by Pearson. 2. Calculate the unit cost of ending work-in-process inventory assuming that the number of units in the job(s) total 250 units. 3. Calculate the cost of goods manufactured and the unadjusted gross margin for the month of December. 4. Calculate the amount of over- or under allocated overhead for the year.
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