Calculation of Predetermined overhead rate :
Given that estimated manufacturing costs = $231,000 and Machine hours = 33,000
===> Predetermined overhead rate = $231,000/33,000 = $7 per machine hour.
a.
Bakerston Company Schedule of Cost of Goods Manufactured For the Year Ended |
|
Direct Materials | |
Raw materials, beginning balance | $14,000 |
Add : raw materials purchased | $315,000 |
Raw materials available for use | $329,000 |
Less : raw materials, ending balance | $22,000 |
Direct materials used | $307,000 |
Direct labor | $377,612 |
Factory overhead applied* | $222,761 |
Total manufacturing costs | $907,373 |
Add : work in process, beginning balance | $27,000 |
Total cost of work in process | $934,373 |
Less : work in process, ending balance | $9,000 |
Cost of goods manufactured | $925,373 |
* Factory overhead applied = 31,823 X $7 = $222,761
b.Calculation of Cost of goods sold :
Cost of goods sold | |
Finished goods, beginning balance | $62,000 |
Add : Cost of goods manufactured | $925,373 |
Goods available for sale | $987,373 |
Less : finished goods, ending balance | $77,000 |
Cost of goods sold | $910,373 |
C.
Actual overhead cost = $95,110 + $10,919 + $120,000 = $226,029
Applied overhead cost = $222,761
===> Overhead cost is Underapplied by $3,268
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