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ACCT2102 Em 2.K 1 / 1 110%- Beginning balance, Finished Goods Inventory 17,000 Purchases of raw materials 54.000 Factory electricity 10,000 Direct labor payroll 32,000 Depreciation on factory equipment 35 000 Insurance on factory building 8.000 Indirect materials used in production 7,000 Total raw materials used in production 65,000 Indirect labor payroll 24000 Cost of goods manufactured 200.000 Cost of goods sold 210.000 Estimated manufacturing overhead is $450,000 and overhead is allocated based on machine hours. Estimated machine hours are 750,000 hours. Actual machine hours incurred was 145,000 hours Actual overhead incurred was tracked to determine the adjustment to cost of goods sold for any underlover applied manufacturing overhead. Instructions: On a blank sheet of notebook paper, write your full name in the top right corner and your student number in the top left corner. Use this to record your answers to the following six questions. Take a picture of your work and convert it to PDF Upload the PDF to the Exam 2 assignment drop box in D2L. Note: To earn credit, you must show your work and label each figure. Questions: 1. What is the company's predetermined overhead rate? 2. What is the amount of applied overhead for the year? 3. What is the total manufacturing cost for the year (use applied overhead)? 4. Was overhead underapplied or overapplied? By how much? 5. Assuming unadjusted cost of goods sold is included in the given information, calculate the cost of goods sold using the direct method. 6. In one concise sentence, name the main benefit of segmented income statements. & Cat 2 3 4 5 & 7 6 8. E R.

Answer 1

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Answer-

1. Predetermined overhead rate = Estimated manufacturing overhead/Estimated machine hours $450000/750000 = $0.60 per machine hour. 2. Amount of applied overhead = 145000 x $0.60 = $87000 3. Direct material used in production ($65000 - $7000) 58000 Direct labor 32000 Overhead 87000 Total manufacturing cost $ 177000

4. Actual overheads incurred: Factory electricity Depreciation on factory equipment Insurance on factory building Indirect materials used in production Indirect labor payroll Total actual overheads incurred Overhead applied Overapplied overhead $ 10000 35000 8000 7000 24000 84000 87000 3000