Question

Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year Raw materials Work in process Finished goods $ 11,700 32,000 $107,000 $ 15,200 $ 14,300 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,300 machine-hours and incur $276,800 in manufacturing overhead cost. The following transactions were recorded for the year . Raw materials were purchased, $412,000 Raw materials were requisitioned for use in production, $408,500 (S380,000 direct and $28,500 indirect) The following employee costs were incurred direct labor, $340,000, indirect labor, $71,000 and administrative salaries, $157,000. Selling costs, $114,000 Factory utility costs, $20,000 Depreciation for the year was $124.000 of which $113,000 is related to factory operations and $11,000 is related to selling, general, and administrative activities Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,400 machine-hours Sales for the year totaled $1,285,000 Required a.Prepare a schedule of cost of goods manufactured in good form (Do not round predetermined overhead rate. Input all amounts as positive values. Omit the "$" sign in your response.) Schedule of Cost of Goods Manufactured Direct materials (Click to select) (Click to select",-(Click to select) Total raw materials available (Click to select)(Click to select) Raw materials used in production (Click to select)(Click to select) (Click to select) (Click to select) Total manufacturing cost (Click to select)(Click to select) (Click to select) (Click to select) Cost of goods manufactured

Answer 1

Bakerston Company

1. Schedule of cost of goods manufactured:

Schedule of cost of goods manufactured
Direct materials:
Raw materials - Beginning Inventory	$11,700
Add: Purchases	$412,000
Total raw materials available	$423,700
Less: raw materials - ending inventory	$15,200
Raw materials used in production	$408,500
Less: indirect materials	$28,500
Direct materials:		$380,000
Direct labor		$340,000
Manufacturing overhead applied		$232,500
Total manufacturing costs		$952,500
Add: Beginning work in process inventory		$32,000
		$984,500
Less: Ending work in process inventory		$14,300
Cost of goods manufactured		$970,200

1. Determination of over applied or under applied overhead:

Actual manufacturing overhead cost incurred –

actual manufacturing overhead cost incurred - indirect materials $28,500 indirect labor $71,000 factory utilities $20,000 Factory Depreciation $113,000 manufacturing overhead cost incurred $232,500 manufacturing overhead applied $230,400 manufacturing overhead under applied $2,100 Note: Predetermined manufacturing overhead rate = $276,800 Estimated machine hours = 17,300
Predetermined overhead rate = 276,800/17,300 = $16 Manufacturing overhead applied = predetermined overhead rate x cost per actual machine hour = 14,400 MHs x $16 = $230,400

1. Income Statement –

Income Statement
Sales	$1,285,000
Cost of goods adjusted	$956,300
Gross margin	328,700
Less: selling and administrative costs
administrative salaries	$157,000
selling costs	$114,000
Depreciation	$11,000
total selling and administrative costs	$282,000
Net Income	$46,700

Working –

Beginning finished goods inventory	$107,000
Cost of goods manufactured	$970,200
goods available for sale	$1,077,200
Less: ending finished goods inventory	$123,000
Unadjusted cost of goods sold	$954,200
Add: underapplied overhead	$2,100
Cost of goods sold	$956,300