Exercise 4-34 (Algo) Application of Overhead [LO 4-3, 4-4, 4-6]
Whitley Construction Company is in the home remodeling business. Whitley has three teams of highly skilled employees, each of whom has multiple skills
involving carpentry, painting, and other home remodeling activities. Each team is led by an experienced employee who coordinates the work done on each job. As
the needs of different jobs change, some team members may be shifted to other teams for short periods of time. Whitley uses a job costing system to determine
job costs and to serve as a basis for bidding and pricing the jobs. Direct materials and direct labor are easily traced to each job using Whitley’s cost tracking
software. Overhead consists of the purchase and maintenance of construction equipment, some supervisory labor, the cost of bidding for new customers, and
administrative costs. Whitley uses an annual overhead rate based on direct labor hours.
Whitley has recently completed work for three clients: Harrison, Barnes, and Tyler. The cost data for each of the three jobs are summarized below:
Job Direct Materials Direct Labor Hours Direct Labor Cost
Harrison $ 6,948 55 $ 15,783
Barnes 13,424 94 23,770
Tyler 44,002 125 51,240
Budgeted direct materials cost and direct labor cost for the year are estimated at $515,000 and $730,000, respectively. Direct labor hours are budgeted at 29,000
hours, and total overhead is budgeted at $493,000.
Required:
1. Calculate the total cost of each of the three jobs.
2. Suppose that for the entire year, Whitley used 30,300 labor hours and total actual overhead was $512,000. What is the amount of underapplied or overapplied
overhead?

 Required 1 Required 2 
Complete this question by entering your answers in the tabs below.
Calculate the total cost of each of the three jobs.
Required 1 Required 2
$
$
$
Total Job
Cost
Harrison 935
Barnes 1,598
Tyler 2,125