Question

Brighton Services repairs locomotive engines. It employs 100 full-time workers at $18 per hour. Despite operating at capacity, last year's performance was a great disappointment to the managers. In total, 10 jobs were accepted and completed, incurring the following total costs. Direct materials Direct labor Manufacturing overhead $1,043,400 5,040,000 1,260,000 Of the $1,260,000 manufacturing overhead, 40 percent was variable overhead and 60 percent was fixed. This year, Brighton Services expects to operate at the same activity level as last year, and overhead costs and the wage rate are not expected to change. For the first quarter of this year, Brighton Services completed two jobs and was beginning the third (Job 103). The costs incurred follow. Job 101 102 103 Total manufacturing overhead Total marketing and administrative costs Direct Materials $ 138,000 101,000 94,800 Direct Labor $496,000 312,800 198,700 272,000 118,000 You are a consultant associated with Lodi Consultants, which Brighton Services has asked for help. Lodi's senior partner has examined Brighton Services's accounts and has decided to divide actual factory overhead by job into fixed and variable portions as follows. 102 Actual Manufacturing Overhead Variable Fixed $ 30,700 $ 104,800 28,300 8 9,000 5,400 13,800 $ 64,400 $ 207,600 103 In the first quarter of this year, 40 percent of marketing and administrative cost was variable and 60 percent was fixed. You are told that Jobs 101 and 102 were sold for $862,000 and $566,000, respectively. All over- or underapplied overhead for the quarter is written off to Cost of Goods Sold. Required: a. Present in T-accounts the actual manufacturing cost flows for the three jobs in the first quarter of this year. b. Using last year's overhead costs and direct labor-hours as this year's estimate, calculate predetermined overhead rates per direct labor-hour for variable and fixed overhead. c. Present in T-accounts the normal manufacturing cost flows for the three jobs in the first quarter of this year. Use the overhead rates derived in requirement (b). d. Calculate operating profit (loss) for the first quarter of this year under actual and normal costing systems. Finished Goods Inventory Beg. Bal. Total DL Beg Ball Total 101 Finished Goods Total 102 Finished Goods 769,500 1,300,600 Cost of Goods Sold Work-in-Process Inventory 0000 1,007,500 7 89.500 Total 101 Finished Goods Total 102 Finished 333,800 5 31,100 Goods 64.400 207,600 0 312,700 Total DM 531,100 0 0 Total Variable MOH Total Fixed MOH End. Bal. End. Bal. Cost of Goods Sold Beg. Bal. Finished Goods 0 1,300,600 0 1,300,600 0 End. Bal.

Please help me find what I did wrong in the very last number. Everything is right except the red. I need to fix the red part. Thank you!

Answer 1

Sales Revenue	$    14,28,000
Less: Cost of Goods Sold	$    12,50,000
Less : Underapplied Overhead	$         20,125
Gross Profit	$      1,57,875
Selling and Administrative expenses	$      1,18,000
Operating Profit	$         39,875