Tahoe Company is a manufacturing firm that uses job-order costing. At the beginn
ID: 2377993 • Letter: T
Question
Tahoe Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows:
Beginning Balance Ending Balance
Raw materials $19,000 $12,000
Work in process $82,000 $64,000
Finished goods $32,000 $47,000
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 36,000 machine-hours and incur $216,000 in manufacturing overhead cost. The following transactions were recorded for the year:
a. Raw materials were purchased, $443,000.
b. Raw materials were requisitioned for use in production, $450,000 ($435,000 direct and $15,000 indirect).
c. The following employee costs were incurred: direct labor, $229,000; indirect labor, $54,000; and administrative salaries, $117,000.
d. Selling costs, $119,000.
e. Factory utility costs, $21,000.
f. Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities.
g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 38,000 machine-hours.
h. The cost of goods manufactured for the year was $910,000.
i. Sales for the year totaled $1,173,000 and the costs on the job cost sheets of the goods that were sold totaled $895,000.
j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
You can assume that all transactions with employees, customers, and suppliers were conducted in cash.
______ a. What is the POHR?
______ b. What is the total amount of overhead applied?
______ c. Prepare a schedule of cost of goods manufactured in good form.
______ d. Was the overhead underapplied or overapplied? By how much?
______ e. Prepare a cost of goods sold schedule for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold.
______ f. Prepare an income statement for the year in good form.
Explanation / Answer
POHR= (117,000+119,000+7,000 ) /36,000= 6.75 /MACHINE HOURS
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.