Operating data for custom division of the Duluth Office Furniture Co. for fiscal 2020 are presented below. The custom division of Duluth Office Furniture makes custom order tables and chairs and desks for applications such the Raymond A, Mason School of Business at The College of William and Mary. Their manufacturing operation and their retail showroom are located in the same building. Approximately 70% of the total space in the building is devoted to custom manufacturing and the remaining 30% of the space is devoted to the retail showroom.

The following information pertains to the operations of the company for 2020.

Purchases of raw material in 2020	$300,000
Manufacturing direct-labor cost incurred	$480,000
Commission salaries of sales force	$112,000
Guaranteed salaries of sales force	$48,000
Salaries of production supervisors	$28,000
Various factory related costs	$60,000
Operating expenses for the building	$100,000
Retail selling and administrative expenses	$282,000
Depreciation for the building in 2020	$100,000
Depreciation for the factory equipment in 2020	$110,000
Depreciation for the delivery trucks in 2020	$30,000
Raw materials inventory, 12/31/19	$20,000
Raw materials inventory, 12/31/20	$38,000
Work in process inventory, 12/31/19	$46,000
Work in process inventory, 12/31/20	$40,000

The following three questions will reference this data.

1) Using the information above, compute the cost for raw materials used in production for the year ended December 31, 2020.

2) Using the information above, compute the ACTUAL COST of manufacturing overhead. To support your answer, prepare a schedule (a schedule is simply “accounting-speak” for a “listing”) showing what you included in your calculation.

3) Using the information above, if the company reports that for 2020 manufacturing overhead is under-applied by $18,000, what is the amount of overhead that they applied to work-in-process during 2020?

Answer rating: 100% (QA)

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