Question

126% + Zoom Add Page T Text View Insert Table Chart Shape Media Comment Collaborate Format Document 1. (1 point) Compute the predetermined overhead rate Morrison will use to apply MOH to work in process. 2. (1 point) year. Compute the amount of overhead applied to Work-in-Process during the 3. (3 points) Compute the ending balances in Raw Materials, Work-in-process, and Finished Goods accounts (hint: don't forget to include beginning balances). 4. (2 points) Compute the amount of over- or under-applied overhead for the year ibe sure to label it as over or under applied). 5. (2 points) Assuming Morrison closes under or over-applied overhead to Cost of Goods Sold, compute adjusted COGS for the period. 6. (2 points) Prepare a traditional format income statement for the year. (ignore income taxes).

Answer 1

(1) fredetermined overhead Rafe => Estimated manufacturing overhead xoo Direct labour cost 300000 xloo 5091, 609 200

12) overhead applied to work-in- Process Direct Labour applied Predetermined suerhead rate 1 525ooo X 50%. 262500 Balance (3) i Ending Raw Materials Begining & Purchased used 12 doo 10000 (79276) Ending Balana 145724

32 pooo 63420.8 525000 + (ii) Ending work-in-process в Begining Balance & Direct Raw Material used Direct labour used & overhead applied wip transfered to finished goods Ending Balance 262 50e (809903) 370 920.8 (ii) Ending finished goods 400000 Begining Balance SODOO + wip transfered in finished goods finished goods sald Ending balance (1010000) 200000 (4) over applied onto head Applied overhead Actual overhood incurred =) Actual overhead incurred - Indirect material t Indirect lobour + Indirect cost of production & Depreciation of Manufacturing overhead 2 62500 ( 15855.2.+ 75000 +85000 75000) 11644.8

(5) Adjusted cost of goods sad Direct Material used Direct labour cost 63420.8 52 500D 588420.8 262 500 32 0000 (370920.8) Prime cost Total Manufacturing over head applied Add", WIP Beginning Less: WIP ending Cost of goods Manufactured Adel, finished good Begining ens: Euding finished goods 8 40992 (200100) 1ODDODD Cost of goods sold Adjusted COGS COGS over applied oH Adjusted COGS 10 DODOO 11644.8 - 988355.2 (6) Net Income 1500 DO Sales 988 355.2 Lessi, Adjusted cast of goods sold Lessa To tal selling & administrative Expenses 50 5000 ( 2,30,000 + 230000 t4 SODO) reet Income 6644.8