Design Homes builds custom homes. The firm uses a job-order costing system and applies manufacturing overhead based
Question:
There was no beginning balance in the finished goods account. The company worked on three homes during the first quarter. Beginning balances, direct materials used, and direct-labor hours spent were as follows:
Manufacturing overhead during the first quarter comprised of:
Depreciation ..... $187,500
Indirect labor ...... 50,000
Indirect materials ..... 30,000
Other construction costs ... 108,500
Design completed job no. 101 and job no. 102 during the period. Job no. 101 was sold, producing a profit of $68,000 for the firm.
Required:
a. Determine the companys predetermined overhead application rate.
b. Calculate the unadjusted balance for the cost of goods sold accounts.
c. Calculate the adjusted COGS for the period after closing any under- or overapplied overhead to the COGSaccount.
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Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
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