Question

TIME 3 HOURS wer Bookdet. (100 MARKS TRUCTRON (25 marks system and applies overhead cost to jobs (not on the basis of raw materials purchased on a cost formula that estimated RM800.000 of allocation base of RM500,000 direct material cos LE C OSTROV contar con me in produ bad rate was based ed for an estimated ww me wing data for the just completed year A died the follow Beginning (RM) 20.000 150,000 260,000 Ending (RM) 80.000 70,000 400 000 1 Raw materials Work in Process Finished Goods RM 510,000 90,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent: building 170,000 48,000 260,000 95,000 7,000 180,000 Required: a) Compute the predetermined overhead rate for the year. (3 marks) b) Determine the actual manufacturing overhead costs. (4 marks) c) Compute the cost of goods manufactured for the year assuming all raw materials are used in production as direct materials. (6 marks) d) Compute the unadjusted cost of goods sold for the year. (4 marks)

Answer 1

Solution: a) Predetermined overhead rate=Estimated overhead/Estimated direct material used 800000/500000 160% b) Indirect labor property taxes depreciation on equipment maintenance insurance Rent-building Actual manufacturing overhead 170000 48000 260000 95000 7000 180000 760000 calculation of of Cost of Goods Manufactured Direct materials used Direct labor Factory overhead applied=510000*160% Total manufacturing costs Add: Work in process inventory, beginning Total cost of work in process Less: Work in process inventory, ending Cost of goods manufactured 510000 90000 816000 1416000 150000 1566000 70000 1496000 d) calculation of Unadjusted Cost of goods sold Finished goods inventory, beginning Cost of goods manufactured Cost of goods available for sale Less: Finished goods inventory, Ending Unadjusted Cost of goods sold 260000 1496000 1756000 400000 1356000