Question

Chec Manufacturing Overhead 233,800 Credits ? 473,000 Debits Raw Materials Bal. 1/1 16,800 Credits Debits 122,000 Bal. 12/31 26,80 Work in Process Bal. 1/1 21,000 Credits Direct materials 91,000 Direct labor 153,000 Overhead 244,880 Bal. 12/31 Finished Goods Bal. 1/1 41,000 Credits Debits Bal. 12/31 61,500 Factory Wages Payable 187,000 Bal. 1/ 1 Credits Bal. 12/31 9 ,500 182,800 4,500 Cost of Goods Sold ? Required: 1. What was the cost of raw materials used in production during the year? 2. How much of the materials in (1) above consisted of indirect materials? 3. How much of the factory labor cost for the year consisted of indirect labor? 4. What was the cost of goods manufactured for the year? 5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer 6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year? 7. Was manufacturing overhead underapplied or overapplied? By how much? 8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If

Answer 1

ANS :-

Answer no. 1

Raw material inventory at beginning of year 1/1	16000
Add: Purchase of raw materials(debits)	122000
Less: Raw material inventory at the end of year 12/31	26000
Cost of raw materials put into production	112000

Answer no. 2

Cost of raw materials put into production	112000
Less: Direct material debited to work in progress	91000
Indirect materials cost	21000

Answer no .3

Total factory wages accured during the year	182000
Less: Direct labour cost debited to work in progress	153000
Cost of indirect labours	29000

Answer no .4

Cost of goods manufactured for the year	473000
(amount credited to work in progress)

Answer no .5

Finished good inventory at beginning of year 1/1	41000
Add: Cost of good manufactured	473000
Cost of good available for sale	514000
Less: Finished good inventory at end of year 12/31	61500
Cost of good sold	452500

Answer no .6

Predetermined Overhead rate =Manufacturing overhead applied / Direct labour cost *100

= (244800 / 153000) *100 =160%

Answer no .7

Actual manufacturing OH cost ( from manufacturing OH account)	233800
Less: Applied manufacturing OH ( from work in progress)	244850
Over applied Overhead	(11,050)

Answer no .8

Ending balance in work in progress(note 1)	36800
Less: Direct labour cost	8250
Less:manufacturing overhead cost( 8250 * 160%)	13200
Direct materail cost	15350

Note :

Work in progress at the beginning of year 1/1	21000
Add: Direct material debited to work in progress	91000
Add: Direct labours debited to work in progress	153000
Add : Overhead debited to work in progress	244800
Less: Cost of good manufactured for the year	473000
( Amount credited to work in progress)
Ending balance in work in progress	36800