In addition to manufacturing and selling its own products, the Final Company buys and sells some...
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In addition to manufacturing and selling its own products, the Final Company buys and sells some other trade goods as well. The company uses a job-order costing system at its manufacturing plant. The company uses normal costing with two direct cost categories (direct materials and direct labor) and applies manufacturing overhead costs to the products using machine hours as the allocation base. At the beginning of 2021, it was estimated that the company would work for a total of 175,000 direct labor hours and 250,000 machine hours for the production. Manufacturing overhead costs are budgeted as $875,000 for 2021. Required: 1. What is the predetermined overhead rate for the year 2021? 2. During 2021, production required a total of 157,000 direct labor hours and 190,000 machine hours, and the company incurred a total manufacturing overhead cost of $725,000 actually. Compute the under or over applied manufacturing overhead for the year. 3. End of year balances are as follows: Raw Materials Inventory Work-in Process Inventory Finished Goods Inventory Cost of Goods Sold (including $250,000 Cost of Merchandise Inventory Sold) a. b. $ 150,000 180,000 240,000 630,000 $ 1,200,000 Prepare the necessary calculations to close the control account, assuming that the difference is considered material. What will be the amount of Finished Goods Inventory to be reported on the Statement of Financial Position? Cost of Goods Sold to be reported on the Profit or Loss Statement? i. ii. In addition to manufacturing and selling its own products, the Final Company buys and sells some other trade goods as well. The company uses a job-order costing system at its manufacturing plant. The company uses normal costing with two direct cost categories (direct materials and direct labor) and applies manufacturing overhead costs to the products using machine hours as the allocation base. At the beginning of 2021, it was estimated that the company would work for a total of 175,000 direct labor hours and 250,000 machine hours for the production. Manufacturing overhead costs are budgeted as $875,000 for 2021. Required: 1. What is the predetermined overhead rate for the year 2021? 2. During 2021, production required a total of 157,000 direct labor hours and 190,000 machine hours, and the company incurred a total manufacturing overhead cost of $725,000 actually. Compute the under or over applied manufacturing overhead for the year. 3. End of year balances are as follows: Raw Materials Inventory Work-in Process Inventory Finished Goods Inventory Cost of Goods Sold (including $250,000 Cost of Merchandise Inventory Sold) a. b. $ 150,000 180,000 240,000 630,000 $ 1,200,000 Prepare the necessary calculations to close the control account, assuming that the difference is considered material. What will be the amount of Finished Goods Inventory to be reported on the Statement of Financial Position? Cost of Goods Sold to be reported on the Profit or Loss Statement? i. ii.
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