Hogle Corporation uses work order costing and charges overhead costs to jobs based on machine-hours worked. For the newly completed year, the company estimated that 75,000 machine-hours would run and the overall production cost would rise to $450,000. The company actually worked 80,000 machine-hours.

The company provided the following financial data regarding its actual activities during the year:

Direct Materials $360,000 Indirect Materials $20,000

Direct Labor $75,000 Indirect Labor $110,000

Sales Commissions $90,000 Administrative Salaries $200,000

General Sales Expenses $17,000 Factory Service Costs $43,000

Advertising Costs $180,000 Factory Depreciation $280,000

Sales and Administrative Depreciation $ 70,000 Factory Insurance $ 7,000

Sales and Administrative Insurance $3,000 Sales $1,500,000

Necessary:

1. Classify each of the above costs as Direct Product Cost, Production Overall Cost, or Period Cost by entering the amount in the appropriate column.

2. Calculate the Predetermined Overhead Rate.

3. Calculate the amount of production overheads applied to production.

4. Assuming there was no work in progress at the beginning of the year and no work in progress at the end of the year, what was the cost of goods produced for that year (ie what was the total dollar amount of business costs for the year)?

5. Calculate the unit cost, assuming that only one type of product is produced and 91,500 units are produced during the year.

6. Calculate the amount of over-applied or under-applied overhead for the year.

7. 87,000 units were sold in the year. Calculate the unadjusted cost of goods sold for the year.

8. Calculate the adjusted cost of goods sold for the year.

Create an Income Statement for Year 9.

Answer rating: 100% (QA)

1 Classify each cost as Direct Product Cost Production Overhead Cost or Period Cost Direct Product Costs Direct Materials 360000 Direct Labor 75000 Pr... View the full answer