Question

PA2-8 (Algo) Recording Manufacturing Costs, Preparing a cost of Goods Manufactured Report, and Calculating Income from Operations (LO 2-3, 2-4,2-5,2-6) Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $58,000 and its total manufacturing overhead cost to be $104,400. Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 1. Calculate the predetermined overhead rate. 2. Fill in the missing values in the T-accounts 3. Compute over- or underapplied overhead. 4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over or underapplied overhead. 5. Prepare a brief income statement for the company Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Calculate the predetermined overhead rate. Predetermined Overhead Rate % of Direct Labor Cost Required 2 >

Answer 1

Requirement (2) Requrement (1) Predetermined Overhead Rate : Estimated Total manufacturing overhead (A) Estimated Total direct labour cost (B) Raw Material Inventory $ 13,500 $78,700 $ 93,900 $ 28,700 Beginning Balance Purchase Ending Balance 104400 58000 Beginning Balance Direct material Direct labour Applied overhead Endng Balance Work in Process Inventory S 28,500 $191,860 Finished goods inventory S 69,000 S $ 40,700 $ 73,260 $ 19,600 Predetermined Overhead Rate (A/B) 180% of Direct Labour Cost Fnished goods Inventory Beginning Balance $ 41,600 $184,260 Cost of goods sold Cost of goods completed $ 191,860 Ending Balance $ 49,200 Cost of goods sold Unadjusted cost of goods sold $ 184,260 Adjusted cost of goods sold $ 163,400 Sales Revenue $ 306,000 Requrement (4) DOBSON MANUFACTURING COMPANY Cost of Goods Manufactured and Sold Report Beginning raw materials inventory $ 13,500 Plus: Raw material purchases $ 93,900 Less: Indirect material used $ (9,700) Less: Endng raw materials inventory $ (28,700 Direct Materials used in Production $ 69,000 Direct Labor $ 40,700 Manufacturing Overhead $ 73,260 14.800 Indirect materials Indirect labour Factory Depreciation Factory Rent Factory Utities Other Factory Costs Actual Overhead Manufacturing Overhead s 9,700 S 73,260 Appled Overhead $ $ S 12,000 $ 5,400 $ 1,700 $ 8,800 $ 52,400 Adm. Salaries Office Depreciation Advertising Ending Balance Selling, General and administrative expense $ 27,700 $ 19,300 $ 13,100 $ 60,100 Total Current Manufacturing Costs Plus: Beginning Work in Process inventory Total Work in Process Less: Ending Work in Process inventory Cost of Goods Manufactured Plus: Beginning Finished Goods inventory Cost of Goods Available for Sale Less: Ending Finished Goods inventory Unadjusted Cost of Goods Sold Adjustment for Overappled Overhead $182,960 $ 28,500 $211,460 $ (19,600) $191,860 $ 41,600 $ 233,460 $ (49,200 $184,260 $ (20,860) Requirement (3) Manufacturng overhead Overappled $ 20,860 Adjusted Cost of Goods Sold $ 163,400 Note : Please comment down for any further assistance. In case of any issue with T accounts, Feel free to comment I'l assist ASAP Requirement (5) DOBSON MANUFACTURING COMPANY Income Statement Sales Revenue $306,000 Cost of Goods Sold $ 163,400 Gross Proft $ 142,600 Seling, General, and Administrative Expense $ 60,100 Net Income from Operations $ 82,500