Question

Sallie Company applies factory overhead on the basis of a rate per direct labor-hour. The company provides you with the following data for the month of May 20X1. Selected inventories have different have the following balances: May 1 May 31 Work in process $78,000 $85,000 Finished goods 81,000 60,000 Prime costs for the month were: Direct Material used 48,000 Direct labor (45,000 actual labor-hours) 294,000 Sales have increased 20 percent over April's net sales of $500,000; as a result, gross margin for May is $190,000. Actual factory overhead for May is $58,100. Required: 1. Prepare a cost of goods manufactured statement showing only applied factory overhead. Also prepare an income statement. 2. Determine the factory overhead application rate. 3. Determine the amount of over-or under-applied overhead.

Answer 1

Cost of Goods manufactured statement : __ $ yfood 284ora shoro Dibect Materials Direct labor. Manufactising Overhead applied O Crona Enplema teore)”. Total Manufacturing Cost Add Beginning wein Progress Deduct Ludine w in boogren Cast of Goods Manufactured n Income statement Sales (waw X1204) Cost of Goods sold: Direct heaterials u hono Direet lasor grew Mannefact/fallory of Applied sucw 396000 78000 8rovo 38 Чоло 38 Gwew

Tosel Manny Cost Beg. win Rrogen End, win progen Cost of Good many. Add Beg finished Inventing by Ending fushe loweety Cost a Coods sold Add undes applied for. Cost of Goods sold Net Proone 1. 0 sow 389000 How boova 410000 4100 (414L00) 1859 co factory oven talfory ovestead Applications Rute : $ 1-2 Ph, Explanation factory overhead Application Rate = for Applied - Alasor hos. 5 yoo 4sho (civen = 1.2 Ph.

factory of menus. O'n ander applied = Actual foot - Applied f.oh z 58100 - Shoro "Under applied for. 2 & 400 / so

Emplomation Sale of April & swew sale & May 2010 above & swew & sono x2 April sales May sales . & 2 & Grow Gross Margin $ 19000 Cost of Goods hold (May) & sale - Gross Mazgin ? 2 2 Gwro - 190000 20) __ $ 41oovo Cost of Goods sold o g Cost of Goods - Manufactured + Beginning finished totin box trovo inventory - Ending finished Iurentny. 19000 = Cost of Goods Many. & 8000 - 60000 Cost of Good manu. - 41000'0 - 21000 Cost a Goods money. a 389000 Cost & Goods Manufactured Disced Material t Direct labor+ Manuj. O'H & Beg, WinPages - - ending win Progress - 389000 a 48000 + 294000 + Manu. On appred to 78000 - 85000 w 389000 = (335000 + Manuf. D. h applied Manufacturing of applied a 389000 3300 Manly. Oh, applied & $5400 Actual Manualhising dit & 58100 VO