Req 1A - 1B

Exercise 2B-1 (Algo) Overhead Rate Based on Capacity (LO2-6] Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 183 hours per month. The estimated total manufacturing overhead cost at capacity is $15,372 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $84 per hour of bandsaw use. The results of a recent month's operations appear below: Sales Beginning inventories Ending inventories Direct materials Direct labor Manufacturing overhead incurred Selling and administrative expense Actual hours of bandsaw use $43, 770 $ 0 $ 0 $ 5,370 $ 8,850 $14,240 $ 8, 220 153 Required: 1-a. Using Exhibit 2B-1 as your guide, prepare an income statement for the month. Your income statement should include the cost of unused capacity as a period expense. 1-b. What was the cost of unused capacity during the month? Complete this question by entering your answers in the table below. Required 1A Required 1B Using Exhibit 2B-1 as your guide, prepare an income statement for the month. Your income statement should include the cost of unused capacity as a period expense