Evener, Inc. has provided the following data for the month of July. There were n
ID: 2421675 • Letter: E
Question
Evener, Inc. has provided the following data for the month of July. There were no beginning inventories; consequently, the direct materials, direct labor and manufacturing overhead applied listed below are all for the current month:
Total
Manufacturing overhead for the month was overapplied by $3,000
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overapplied during the month in those accounts.
Determine the cost of work in process, finished goods, and cost of goods sold AFTER allocation of the underapplied or overapplied overhead for the period.
Work in Process Finished Goods Cost of Goods SoldTotal
Direct materials $6,030 $16,560 $23,400 $45,990 Direct Labor 3,770 16,560 23,400 43,730 Manufacturing overhead applied 4,950 11,550 16,500 33,000 Total $14,750 $44,670 $63,300 122,720Explanation / Answer
During the month the manufacturing overhead overapplied by 3000$. therfore we have to underapply (deduct) 3000 $ from WIP, FG, COGS. Basis of allcation is ratio of manufacturing overheads among WIP,FG,COGS.
RATIO :4950/33000,11550/33000,16500/33000
WIP =3000*(4950/33000)
=450
FG =3000*(11550/33000)
=1050
COGS =3000*(16500/33000)
=1500
The revised total cost table
Total
=4,950-450
=4500
11,550-1050
=10500
16,500-1500
=15000
=33,000-3000
=3000
Work in Process Finished Goods Cost of Goods SoldTotal
Direct materials $6,030 $16,560 $23,400 $45,990 Direct Labor 3,770 16,560 23,400 43,730 Manufacturing overhead applied=4,950-450
=4500
11,550-1050
=10500
16,500-1500
=15000
=33,000-3000
=3000
Total $14300 $43620 $61800 119720Related Questions
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