Question

Chech 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 $136,500 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: $ $ 134,aca 87,90 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $ $ $ $ $ $ 142, 129 8,888 29, eee 13, aea 8.789 31.aea Raw Materials Work in Process Finished Goods Beginning $ 23,eee $ 48,000 $ 75,eee Ending $ 11, $ 39,080 $ 60,000 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: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the predetermined overhead rate for the year. Predetermined overhead rate % Required 1 Required 2 >

Answer 1

23,000 i Answert 2 Predetermine overhead rate = 136500XICO 91000 = 150% of direct material used 2017 Actual cueshead - 223,600 (142100 +8800 +20,000 +13,000+8,7007 31,000 Died material used: 23,0007148,100 – 11,000 =154,100 Applied Overhead = 154,100X150%= 231,150 Under Applied overhead = 231,150-223,600 = 7,550. 3) Prepare a schedule of cost of goods manufactured for the year. Assume all daw materials are used in production as direct matering Direct material Beginning raw material Purchase 142,100 Less! Ending raw material (11,000) Direct material used 154,100 Direct labour manufacturing overhead 2311150 Total manufacturing cost 472,250 Beginning work in process 48.000 Total cost of work in process 520,250 Ley! Ending work in proces (39.000) est of goods manufactured 481,250 us un adjusted Gst of goods sold = 75000f 481,250 -6000o =496250 S Missing amount Ending balance in work in process 39,000 Direct material 8500 Queshead (8500x1407.) Direct labour (39000 -8500-11,900) 87,000 11.900 18. GOO