Check my work TB Problem Qu. 3-252 Baab Corporation is a... Baab Corporation is

Question

Check my work TB Problem Qu. 3-252 Baab Corporation is a... Baab Corporation is a manufacturi beginning and end of the year ng firm that uses job-order costing. The company's inventory balances were as follows at the Raw materials Work in process Finished Goods 14,458 $22,458 27,458 9,45 62,450 $77,458 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,450 machine-hours and incur $264255 in manufacturing overhead cost. The following transactions were recorded for the year Raw materials were purchased, $315,450 Raw materials were requisitioned for use in production, $307.450 ($280,550 direct and $26,900 indirect) The following employee costs were incurred: direct labor, $377.450; indirect labor, $96,450, and administrative salaries, $172,450 . . Selling costs, $147,450 Factory utility costs, $10,450 Depreciation for the year was $154,000 of which $138,000 is related to factory operations and $16,000 is related to selling. general, and administrative activities Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,090 machine-hours Sales for the year totaled $1.271,000

Explanation / Answer

Estimated total manufacturing overhead 264255 Estimated total machine-hours 33450 Predetermined overhead rate 7.9 Actual total machine-hours 34090 Overhead applied 269311 a Direct materials: Raw materials inventory, beginning 14450 Add: purchases of raw materials 315450 Total raw materials available 329900 Deduct: raw materials inventory, ending 22450 Raw materials used in production 307450 Less: indirect materials 26900 280550 Direct labor 377450 Manufacturing overhead applied 269311 Total manufacturing costs 927311 Add: Beginning work in process inventory 27450 954761 Deduct: Ending work in process inventory 9450 Cost of goods manufactured 945311 b Actual manufacturing overhead cost incurred: Indirect materials 26900 Indirect labor 96450 Factory utilities 10450 Factory depreciation 138000 Manufacturing overhead cost incurred . 271800 Manufacturing overhead applied 269311 Overhead underapplied 2489 c Sales 1271000 Cost of goods sold (adjusted) 932800 =945311+62450-77450+2489 Gross margin 338200 Less selling and administrative expenses: Administrative salaries 172450 Selling costs 147450 Depreciation 16000 335900 Net operating income 2300

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