Compute the predetermined overhead rate for the year. Compute the amount of unde

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Compute the predetermined overhead rate for the year.

Compute the amount of underapplied or overapplied overhead for the year.

Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)

Identify the options available for disposing of underapplied or overapplied overhead? (Select all that apply.)

Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the job’s cost according to the accounting system?

Direct materials made up $24,000 of the $70,000 ending Work in Process inventory balance. Supply the information missing below

     Purchase of raw materials $ 510,000   Direct labor cost $ 90,000   Manufacturing overhead costs:      Indirect labor $ 170,000      Property taxes $ 48,000      Depreciation of equipment $ 260,000      Maintenance $ 95,000      Insurance $ 7,000      Rent, building $ 180,000 Safari File Edit View History Bookmarks Window Help . . . D eto.mheducation.com IA o o o to 6% D. Tue 9:54 PM Q of a Chegg Study Guided Soluti Graded Homework assignm.. Marketing Research Credit Course Documents - ECO . Cutting weight - Powerlifti.. + Lexmark 2200 Serie 2. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production direct materials. as Gitano Products Schedule of cost of Goods Manufactured Direct materials: OneDrive Total raw materials available O I Raw materials used in production s o Total manufacturing cost o Cost of goods manufactured s o 3-a. Compute the unadjusted cost of goods sold for the year(Do not include any underapplied or overapplied overhead in your cost of goods sold figure.) Og O gla 1 I E® 6 F WW IN FX O LA NO

Explanation / Answer

Solution:

1-a. Compute the predetermined overhead rate for the year.

Solution:

1-a. Compute the predetermined overhead rate for the year.

1-a.Predetermined rate = Estimated Overheads/Estimated materials usage PREDETERMINED RATE = est. total mfg. cost/ est. DMU PREDETERMINED RATE = $800,000 / $500,000 PREDETERMINED RATE = $1.60 per Direct Materials Used Now, let's solve for the applied overhead of Job 215: 1-b. Compute the amount of underapplied or overapplied overhead for the year. 1-b. Over/under applied overheads - Applied overheads (Materials used x Overhead rate) minus Actual overheads. Over applied means you have charged more than actual, under applied is obverse of over applied APPLIED OVERHEAD = Actual DMU X Predetermined Rate APPLIED OVERHEAD = $8,500 X 1.60 APPLIED OVERHEAD = $13,600 2. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Gitano Products Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory $20,000 Add: Purchases of raw materials $510,000 Raw materials available for use = $530,000 Deduct: Ending raw materials inventory $80,000 Raw materials used in production = $450,000 Add: Direct labor $90,000 Add: Manufacturing overhead $760,000 Total manufacturing costs = $1,300,000 Add: Beginning work in process inventory $150,000 $1,450,000 Deduct: Ending work in process inventory $70,000 Cost of goods manufactured 550 $1,380,000 3-a. Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.) Cost of goods sold is defined as the actual cost that is directly incurred by manufacturing the good. Thus, take: Incoming inventory + cost of goods created - ending inventory. The Manufacturing overhead is indirect, and is thus not counted. 3-b.Identify the options available for disposing of underapplied or overapplied overhead? (Select all that apply.) d.Underapplied or overapplied overhead may be allocated between Finished Goods and Cost of Goods Sold in proportion to the overhead applied 4. Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the job’s cost according to the accounting system? Finally, to solve for the price that would have been charged for Job 215: Direct Materials Used = $8,500 Direct Labor = 2,700 Applied Overhead = 13,600 Total Costs = $24,800 Multiply by 125% JOB 215 SELLING PRICE = $31,000 5. Direct materials made up $24,000 of the $70,000 ending Work in Process inventory balance. Supply the information missing below DM + DL + MO = TMC or value of each post in WIP (named it beginning balance, ending balance TMC or COGM). So, it WIP ending balance = 70k with DM = 24k and DL = 24k then MO = 70-24-24 Direct Materials (DM) $24,000 Direct Labor (DL) $24,000 Manufacturing overhead (MO) = $70,000-$24,000-$24,000=$22,000 $22,000 Work in process inventory (WIP) $70,000

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