Question

Baab Corporation is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:

	Beginning Balance		Ending Balance
Raw materials	$	14,550​	$	22,550​
Work in process	$	27,550​	$	9550​
Finished Goods	$	62,550​	$	77,550​

The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,550 machine-hours and incur $271,755 in manufacturing overhead cost. The following transactions were recorded for the year:

Raw materials were purchased, $315,550.

Raw materials were requisitioned for use in production, $307,550 ($280,450 direct and $27,100 indirect).

The following employee costs were incurred: direct labor, $377,550; indirect labor, $96,550; and administrative salaries, $172,550.

Selling costs, $147,550.

Factory utility costs, $10,550.

Depreciation for the year was $160,000 of which $144,000 is related to factory operations and $16,000 is related to selling, general, and administrative activities.

Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,110 machine-hours.

Sales for the year totaled $1,285,000.

Required:

Do not enter any commas (except for the pre-determined OH rate) and round to the nearest dollar

Based on the data presented above, complete the following Table

Pre-Determined OH Rate (round to 2 decimal places)	$
Direct Materials used in Production	$
Direct Labor	$377,550
Total Manufacturing Costs	$
Cost of Goods Manufactured	$
Adjusted Cost of Goods Sold	$
Total Selling and Admin Exp	$336,100
Operating Income	$

Answer 1

Direct materials used
Raw materials inventory,beginning					14,550
Add :purchases of raw materials					315,500
total raw materials available	Cost of goods manufactured				330,050
Deduct:raw materials inventory,ending					22,550
Raw materials used in production					307,500
less:Indirect materials					27,100
Direct materials used						280,400
direct labor						377,550
manufacturing overhead applied						276291
total manufacturing costs						934,241
Add:Beginning work in process inventory						27,550
						961,791
Deduct:ending work in process inventory						9,550
Cost of goods manufactured						952,241
Actual overhead
Indirect material					27,100
indirect labor					96,550
Factory utility costs					10,550
Depreciation-factory					144,000
total actual overhead						278,200
applied overhead						276291
under applied						1,909
Beginning finished goods inventory					62,550
Add cost of goods manufactured					952,241
cost of goods available for sales					1,014,791
less ending finished goods inventory	cost of goods sold				77,550
unadjusted cost of goods sold					937,241
Add:underapplied overhead					1,909
adjusted cost of goods sold					939,150
income statement
sales					1,285,000
less:cost of goods sold					939,150
Gross profit					345,850
Selling & administrative expense	income statement
Administrative salaries				172,550
selling cost				147,550
depreciation selling & adm				16,000
total selling and adm expense					336,100
Net income					9,750