Question

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $57,300 and its total manufacturing overhead cost to be $91,680. Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 1. Calculate the predetermined overhead rate. 2. Fill in the missing values in the T-accounts. 3. Compute over- or underapplied overhead. 4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead. 5. Prepare a brief income statement for the company. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Calculate the predetermined overhead rate. Predetermined Overhead Rate % of Direct Labor Cost Required 1 Required 2 >

Answer 1

1)	predetermined overhead rate				160%	% of Direct labor cost
	91680/57300
2)	Raw materials inventory					Work in process inventory
	Beg bal	14,600	81,200	requisitioned		Beg bal	29,600	187,980	finished goods
	purchases	94,700				DM	69300
	end bal	28,100				DL	41800
						applied oh	66880
						end bal	19,600
	Finished goods inventory					cost of goods sold
	Beg bal	41,000	180,280	COGS		finished	180,280
	completed	187,980				adjusted	167,800
	end bal	48700
	sales revenue					Manufacturing overhead
			313,000			I materials	11,900	66880	applied overhead
						ind labor	13,900
						fac dep	12,800
						fact rent	6,100
						fact utilities	1,400
						other fc	8,300
						Actual	54,400
	Selling ,general & adm expense
	adm salaries	26,600
	office dep	19,400
	advertising	13,800
	end bal	59,800
3)	manufacturing overhead			12,480	over applied
4)	cost of goods manufactured report and sold
	beginning raw materials inventory					14,600
	plus:raw material purchases					94,700
	less:indirect material used					11,900
	less:ending raw materials inventory					28,100
	direct materials used in production					69,300
	direct labor					41800
	manufacturing overhead					66880
	total current manufacturing costs					177,980
	plus:beginning work in process inventory					29,600
	total work in process					207,580
	less:ending work in process					19,600
	cost of goods manufactured					187,980
	plus:beginning finished goods inventory					41,000
	cost of goods available for sale					228,980
	less:ending finished goods inventory					48700
	unadjusted cost of goods sold					180,280
	adjustment for overapplied overhead					12,480
	adjusted cost of goods sold					167,800
5)	income statement
	Sales revenue					313,000
	cost of goods sold					167,800
	Gross profit					145,200
	selling,general and adm expense					59,800
	net income from operations					85,400