Page 137 Gitano Products uses job-order costing and applies overhead cost to jobs based on direct...

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Page 137 Gitano Products uses job-order costing and applies overhead cost to jobs based on direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production. The company provided the following data for the just-completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $510,000 $90,000 $170,000 $48,000 $260,000 $95,000 $7,000 $180,000 Raw Materials Work in Process Finished Goods Required: 1. Compute the predetermined overhead rate. A Aa Beginning Ending $20,000 $80,000 $150,000 $70,000 $260,000 $400,000 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. What options are available for disposing of underapplied or overapplied overhead? 5. Assume the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the information missing below: Page 137 Gitano Products uses job-order costing and applies overhead cost to jobs based on direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production. The company provided the following data for the just-completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $510,000 $90,000 $170,000 $48,000 $260,000 $95,000 $7,000 $180,000 Raw Materials Work in Process Finished Goods Required: 1. Compute the predetermined overhead rate. A Aa Beginning Ending $20,000 $80,000 $150,000 $70,000 $260,000 $400,000 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. What options are available for disposing of underapplied or overapplied overhead? 5. Assume the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the information missing below:

Answer rating: 100% (QA)

Answer 1 To compute the predetermined overhead rate we can use the following formula Predetermined o... View the full answer