Question

ignment Print View Page 1 of 2 Award 5.00 points Grane Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production on the basis of raw materials purchased) Its predetermined overhead rate was based on a cost formula that estimated $113,100 of manufacturing overhead for an estimated allocation base of $87,000 direct material dollars to be used in production. The company has provided the following data for the just completed year $ $ Purchase of raw materials Direct labor cost Manufacturing overhead costs Indirect labor Property Depreciation of equipment $ S $ 131,000 83,000 98.800 8.600 15.000 14 000 Insurance Rent building Raw Materials Work in Proces Finished Goods Beginning $ 23,000 $ $ 48 000 $ $ 72,000 $ Ending 15.000 30 000 50.000 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 $8.800 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 > rev. 11_05_2018_0C_CS-146504 References

Answer 1

1) Predetermined overhead rate= Estimated manufacturing overhead/Estimated direct materials

= $113100/87000= 130%

2) Direct materials used= Beginning balance+Purchases-Ending balance

= $23000+131000-16000= $138000

Manufacturing overhead applied= 138000*130%= $179400

Actual manufacturing overhead= $98800+8600+15000+14000+8800+39000= $184200

Underapplied or overapplied overhead= Actual manufacturing overhead-Manufacturing overhead applied

= $184200-179400= $4800 underapplied

3)

Gitano Products
Schedule of Cost of Goods Manufactured
Direct materials:
Beginning raw materials	$23000
Add: Purchases of raw materials	131000
Total raw materials available	154000
Less: Ending raw materials inventory	-16000
Direct materials used		$138000
Direct labor		83000
Manufacturing overhead applied		179400
Total manufacturing cost		400400
Add: Beginning work in process		48000
Total cost of work in process		448400
Less: Ending work in process		-38000
Cost of goods manufactured		$410400

4)

Beginning finished goods inventory	$72000
Add; Cost of goods manufactured	410400
Total cost of goods available for sale	482400
Less: Ending finished goods inventory	-56000
Unadjusted cost of goods sold	$426400

5)

Direct materials	$8800
Direct labor ($38000-8800-11440)	17760
Manufacturing overhead applied ($8800*130%)	11440
Ending work in process	$38000