Question

VA Overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost 98,500 1,700,000 556 Compute the following amounts for the month of May using T-accounts. 1. Cost of direct materials used. 2. Cost of direct labor used. 3. Cost of goods manufactured. 4. Cost of goods sold." 5. Gross profit. 6. Overapplied or underapplied overhead. "Do not consider any underapplied or overapplied overhead. Raw Materials (RM) Work in Process (WII

Answer 1

Raw Material
Raw Material April 30	46000	Indirect Material	8000
Raw Material Purchases	194000	DM Used	199000
RM May 31	33000
Work In Progress
WIP April 30	9400	Cost of goods manufactured	488,375
DM Used	199000
DL Used	192,500
OH Applied	105,875
WIP May 31	18400
Factory Payroll
Factory Payroll	250000	Indirect Labor	57500
		DL used	192,500
Finished Goods
FG April 30	67000	COGS	522,075
COGM	488,375
FG May 31	33300
Factory Overhead
Indirect Material	8000	Overhead Applied	105,875
Indirect Labor	57500
Other Overhead Costs	98500
Under applied OH	58,125
Income Statement
Sales	1700000
COGS	522,075
Gross Profit	1,177,925

Beginning Inventory	46000
Add: Purchases	194000
RM available	240000
Less: RM Ending	-33000
RM Used	207000
Less: Indirect Materials Used	-8000
Cost of DM used	199000

Cost of direct labor used
Total factory payroll	250,000
Less indirect labor	-57,500
Cost of direct labor used	192,500
Cost of goods manufactured
Beginning work in process inventory	9,400
Plus direct materials	199,000
Plus direct labor	192,500
Plus overhead applied	105,875
(55% of direct labor cost)
Total cost of work in process	506,775
Less ending work in process inventory	-18400
Cost of goods manufactured	488,375
Cost of goods sold
Beginning finished goods inventory	67,000
Plus cost of goods manufactured	488,375
Less ending finished goods inventory	-33300
Cost of goods sold	522,075
Actual overhead incurred
Indirect materials	8,000
Indirect labor	57,500
Other overhead costs	98,500
Total actual overhead incurred	164,000
Overhead applied	105,875
Underapplied overhead	58,125