Question

Gitano Products operates a job order costing system and applies overhead cost to lobs 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 $111.800 of manufacturing overhead for an estimated allocation base of $86,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: $ 139,000 $ 82,000 Purchase of raw materials Direet labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $ 121,600 $ ,800 $ 17,000 $ 14,000 $ 7,100 $ 35,000 Raw Materials Work in Process Finished Goods Beginning Ending $ 28,000 $ 13,000 $ 50,000 $ 38,000 $ 69,000 $ 62,000 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 $38,000 ending balance in Work in Process includes $8,700 of direct materials. Given this assumption, supply the information missing below.

this is what was provided. the questions are under the requred section and the information is all provided

Answer 1

1 Predetemined Overhead Rate Divide Estimated Manufacturing Overhead Estimated Direct Material Cost Predetermined rate Predetermined rate in % 111800 86000 1.30 130% 2 Under Applied - over Applied overhead $ Actual Direct material used Multiply Predetermined rate Manufacturing Overhead applied Less Actual Manufacturing Overhead Under applied Overhead $ $ $ 154,000 Calculated below 130% 200,200 203,500 121600+8800+17000+14000+7100+35000 3,300 Overhead is under applied as applied OH is less than actual OH. Cost of Goods Manufactured Add $ $ $ $ 28,000 139,000 167,000 13,000 less $ Direct Material :- Raw Material Inventory Beginning Material purchased Raw material Available for use Ending Inventory of Raw Material Direct Material used Direct Labor Manufacturing Overhead Applied to WIP Total Manufacturing cost Beginning Work in Process Total cost of Work in process Ending Work in Process Cost of Goods Manufactured $ Calculated above 154,000 82,000 200,200 436,200 50,000 486,200 38,000 448,200 Add less 4 Unadjusted Cost of Goods sold Add Finished Goods Inventory Beginning Cost of Goods Manufactured Cost of goods available for sale Ending Inventory of Finished Goods Unadjusted Cost Of Goods Sold $ $ $ $ $ 69,000 448,200 517,200 62,000 455,200 ods less 5 $ Direct Material Direct Labor Manufacturing Oh Work in Process inventory 8700 given 17,990 11310 38,000 $ Manufacturin OH is 130% direct material = 8700 x 130% = 11310 Work in process ending invis 38000 Direct labor = WIP - DM - OH = 38000 - 8700 - 11310 = 17990