Question

Selected ledger accounts for Realm Company are given below for the just-completed year: Raw Materials Credits Bal. 1/1 Debits 45,000 495,000 Bal. 31/12 90,000 Manufacturing Overhead Debits 437,000 Credits Work in Process Credits 936, 100 Bal. 1/1 Direct materials Direct labour Overhead 92,500 350,000 140,000 455,000 Bal. 31/12 Factory Wages Payable Debits 216,500 Bal. 1/1 Credits 25,000 212,500 Bal. 31/12 21,000 Finished Goods 67,000 Credit Debits Bal. 31/12 175,000 Cost of Goods Sold Debits

Answer 1

1) Cost of raw material used = 45000+495000-90000 = 450000

2) Indirect material = 450000-350000 = 100000

3) Indirect labor = 212500-140000 = 72500

4) Cost of goods manufactured = 936100

5) Cost of goods sold = 67000+936100-175000 = 828100

6) Overhead rate = 455000/350000 = 130% of direct material

7) Applied overhead = 455000

actual overhead = 437000

Manufacturing overhead over applied by 18000

8) Calculate following

Ending Work in process	101400
Direct labor	24350
Manufacturing overhead (33500*1.3)	43550