Question

Lauren Company uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of 2020, Lauren estimated the overhead for the year would be $720,000 and that production would use 90,000 machine hours. The following information relates to the month of August Job 125 Job 126 Job 127 $10.000 $14,000 SO $15.000 $24,000 $20,000 $31.000 Work in process, August 1 Direct materials cost Direct labor costs Actual direct labor hours Actual machine hours $2,000 $7.500 2000 3.000 650 1.500 2.200 800 Also known: • Raw materials beginning inventory was $3.000. Purchases of raw materials for August are $40,000 • Job 127 was started on 8/25; Job 125 and 126 were finished on 8/29 Job 125 sold on 8/31 • Finished goods beginning inventory on B/I was $45.000 • Actual overhead for August was $38.500 Please answer the following questions: 1. What is the predetermined overhead rate? 2. Was overhead over applied or under applied in August? 3. By what amount was overhead over or under applied? 4. What is the cost of goods manufactured for August? 5. What is the cost of goods sold for August? 6. What are prime costs for August? 7. What is the ending work in process balance on August 317 8. What is the ending finished goods inventory balance on August 31?

this is all the information

Answer 1

1) Predetermined overhead rate:
Estimated overheads (a)	$720,000
Estimated machine hours (b)	90,000
Predetermined overhead rate (a/b)	$8
2)
When overheads applied of $36,000 are less than the actual overheads of $38,500, it is said to be Under Applied Overheads.
3)
Applied overheads:
Job 125 (1,500 machine hours * $8 per machine hour)	$12,000
Job 126 (2,200 machine hours * $8 per machine hour)	$17,600
Job 127 (800 machine hours * $8 per machine hour)	$6,400
Total overheads applied	$36,000
Actual overheads incurred	$38,500
Under applied overheads ($38,500 - $36,000)	$2,500
4)
Cost of Goods Manufactured:
Direct materials cost ($15,000 + $20,000 + $2,000)	$37,000
Direct labor costs ($24,000 + $31,000 + $7,500)	$62,500
Total manufacturing overheads	$36,000
Total Manufacturing Costs	$135,500
Add: Beginning work in process inventory ($10,000 + $14,000)	$24,000
Less: Ending work in process inventory ($2,000 + $7,500 + $6,400)	($15,900)
Cost of Goods Manufactured	$143,600

Note: As per Chegg guidelines, the first four sub parts should be answered so i have answered the first four sub parts, hence, please post the remaining sub parts separately.

Please do not give me the negative rating for not answering all the sub parts as i just followed the Chegg guidelines and also it is taking more time to answer each sub part.