(a) Why is Lindell Building Products Company using a job order costing system? 

(b) On what basis does Lindell allocate its manufacturing overhead? Compute the predetermined overhead for the current year. 

(c) Compute the amount of the under-overapplied overhead cost for 2018. 

(d) Lindell had balances in the beginning and ending work in process and finished goods accounts as follows: 

Determine (i) the cost of goods manufactured (ii) cost of goods sold for Lindell during 2018. 

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Lindell Building Products Company is one of the largest manufacturers and marketers of unique, custom-made residential garage doors in NSW as well as a major supplier of industrial and commercial doors, grills, and counter shutters for the new construction, repair, and remodel markets. Lindel1 has developed plans for continued expansion of a network of service operations that sell, install, and service manufactured fireplaces, garage doors, and related products. Lindell uses a job cost system and applies overhead to production on the basis of direct labour cost. In computing a predetermined overhead rate for the year 2018, the company estimated manufacturing overhead to be $24 million and direct labour costs to be $20 million. In addition, the following information is provided: Actual costs incurred during 2018: Direct materials used $30 000 000 Direct labour cost incurred 21 000 000 Manufacturing costs incurred during 2018: Insurance, factory $ 500 000 7 500 000 1 000 000 Indirect labour Maintenance Rent on building Depreciation on equipment 11 000 000 2 000 000 Lindell Building Products Company is one of the largest manufacturers and marketers of unique, custom-made residential garage doors in NSW as well as a major supplier of industrial and commercial doors, grills, and counter shutters for the new construction, repair, and remodel markets. Lindel1 has developed plans for continued expansion of a network of service operations that sell, install, and service manufactured fireplaces, garage doors, and related products. Lindell uses a job cost system and applies overhead to production on the basis of direct labour cost. In computing a predetermined overhead rate for the year 2018, the company estimated manufacturing overhead to be $24 million and direct labour costs to be $20 million. In addition, the following information is provided: Actual costs incurred during 2018: Direct materials used $30 000 000 Direct labour cost incurred 21 000 000 Manufacturing costs incurred during 2018: Insurance, factory $ 500 000 7 500 000 1 000 000 Indirect labour Maintenance Rent on building Depreciation on equipment 11 000 000 2 000 000

Answer rating: 100% (QA)

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