Revisit Exercise 4.14 about Drew Corp. If you have not already completed that exercise, do so before answering the following questions.

Data from Exercise 4.14:

Drew Corp. designs and manufactures mascot uniforms  for high school, college, and professional sports teams. Since each team’s uniform is unique in color and  design, Drew uses a job order costing system. On January 1, the T-accounts for some of Drew’s primary balance sheet accounts were as follows:

During the year, the following events occurred:

1. Drew purchased raw materials costing $114,000 on account.

2. Drew used $149,300 of raw materials in production. Of these, 80% were classified as direct materials  and 20% as indirect materials. (Drew maintains a single Raw Materials Inventory account.)

3. Drew used 31,200 hours of direct labor. The company’s average direct labor rate was $11.00 per hour  (credit Wages Payable).

4. The company’s indirect labor cost was $168,000 (credit Wages Payable).

5. Other manufacturing overhead costs the company incurred on account totaled $98,400.

6. Drew applied $316,800 in manufacturing overhead.

7. The company completed production of goods costing $795,400.

8. The company’s Cost of Goods Sold balance was $801,300 before adjusting for over- or underapplied  overhead.

9. Sales revenue was $1,050,000 (all sales were made on account).

10. Drew collected $803,200 from customers.

11. The company paid accounts payable of $201,300.

12. At year-end, all wages earned during the year had been paid.

Required

a. Calculate under- or overapplied overhead for the year.

b. Assuming that Drew closes under- or overapplied overhead to Cost of Goods Sold, calculate the cost  of goods sold for the year.

c. Assuming that Drew prorates under- or overapplied overhead to the appropriate accounts, calculate  the adjusted Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold balances  for the year. Round percentages to 3 decimal places and dollars to whole dollars.

Transcribed Image Text:

Raw Materials Inventory Work in Process Inventory 1/1 59,400 1/1 25,500 Finished Goods Inventory Cash 1/1 34,600 1/1 38,200 Accounts Receivable Accounts Payable 1/1 47,300 41,900 1/1