Question

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $118,300 of manufacturing overhead for an estimated allocation base of $91,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

Purchase of raw materials	$	135,000
Direct labor cost	$	87,000
Manufacturing overhead costs:
Indirect labor	$	117,300
Property taxes	$	8,600
Depreciation of equipment	$	18,000
Maintenance	$	12,000
Insurance	$	8,600
Rent, building	$	31,000

	Beginning		Ending
Raw Materials	$	29,000	$	16,000
Work in Process	$	46,000	$	39,000
Finished Goods	$	73,000	$	59,000

Required:

1. Compute the predetermined overhead rate for the year.

2. Compute the amount of underapplied or overapplied overhead for the year.

3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.

5. Assume that the $39,000 ending balance in Work in Process includes $8,500 of direct materials. Given this assumption, supply the information missing below:

Required 1 Required 2 Required 3 Required 4 Required 5 Compute the predetermined overhead rate for the year. Predetermined overhead rate 130 %

Required 1 Required 2 Required 3 Required 4 Required 5 Compute the amount of underapplied or overapplied overhead for the year. Underapplied overhead

Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Gitano Products Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production Total manufacturing costs Cost of goods manufactured

Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. Unadjusted cost of goods sold

Assume that the $39,000 ending balance in Work in Process includes $8,500 of direct materials. Given this assumption, supply the information missing below: Direct materials Direct labor Manufacturing overhead Work in process inventory $
PLEASE SHOW ALL WORK AND HOW YOU GOT EVERY NUMBER AND ANSWER...

THANK YOU

Answer 1

2. Underapplied overheads: $3100

Direct materials used = Beginning balance + Purchases - Ending balance = $29000 + $135000 - $16000 = $148000

Manufacturing overhead applied = $148000 x 130% = $192400

Manufacturing overhead costs:
Indirect labor	117300
Property taxes	8600
Depreciation of equipment	18000
Maintenance	12000
Insurance	8600
Rent, building	31000
Total overheads incurred $	195500
Overheads applied	192400
Overheads underapplied $	3100

3.

Gitano Products
Schedule of Cost of Goods Manufactured
Direct materials:
Beginning raw materials inventory	29000
Add: Purchases of raw materials	135000
Total raw materials available	164000
Less: Ending raw materials inventory	16000
Raw materials used in production		148000
Direct labor		87000
Manufacturing overheads		192400
Total manufacturing costs		427400
Add: Beginning work in process inventory		46000
		473400
Less: Ending work in process inventory		39000
Cost of goods manufactured $		434400

4. Unadjusted cost of goods sold: $448400

Gitano Products
Schedule of Cost of Goods Sold
Cost of goods manufactured $	434400
Add: Beginning finished goods inventory	73000
Cost of goods available for sale	507400
Less: Ending finished goods inventory	59000
Unadjusted Cost of goods sold $	448400

5.

Direct materials	8500
Direct labor ($39000 - $8500 - $11050)	19450
Manufacturing overhead (130% x $8500)	11050
Work in process inventory	39000