Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis...
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Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $126,000 of manufacturing overhead for an estimated allocation base of $90,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building Raw Materials Work in Process Finished Goods Beginning $ 24,000 $ 45,000 $ 70,000 $ 131,000 $ 86,000 $ 120,700 $ 8,100 $ 16,000 $ 15,000 $ 9,600 $ 33,000 Ending $ 13,000 $ 40,000 $ 59,000 Required: 1. Compute the predetermined overhead rate for the year. 2. Compute the amount of underapplied or overapplied overhead for the year. 3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. 5. Assume that the $40,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the information missing below: Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $126,000 of manufacturing overhead for an estimated allocation base of $90,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building Raw Materials Work in Process Finished Goods Beginning $ 24,000 $ 45,000 $ 70,000 $ 131,000 $ 86,000 $ 120,700 $ 8,100 $ 16,000 $ 15,000 $ 9,600 $ 33,000 Ending $ 13,000 $ 40,000 $ 59,000 Required: 1. Compute the predetermined overhead rate for the year. 2. Compute the amount of underapplied or overapplied overhead for the year. 3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. 5. Assume that the $40,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the information missing below:
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1The predetermined overhead rate is calculated by dividing the total estimated manufacturing overhea... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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