Using the T-accounts for Raw Materials, WIP, and Finished Goods, please fill in

Question

Using the T-accounts for Raw Materials, WIP, and Finished Goods, please fill in the balances below based on the following information. Raw Materials available (to be transferred to WIP) Cost of Goods Manufactured Cost of Goods Sold Is Manufacturing Overhead under applied or over applied and by how much What account docs the indirect materials transaction post to and for how much Publix Super Markets Inc., has provided the following data for the month of November: The balance in the Work in Process inventory account was $5,000 at the beginning of the month and $10,000 at the end of the month. Publix had $20,000 of raw materials on hand at the beginning of the month and $1,000 on hand at the end of the month. During the month, the company purchased an additional $45,000 of raw materials. During the month, $10,000 of raw materials were requisitioned from the storeroom for use in production. Of these raw materials $5,000 were considered indirect materials. The company also incurred $35,000 in direct labor costs. Publix bases its predetermined overhead rate on the estimated machinc-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the machine-hours for the upcoming year at 10,000 machine-hours. The estimated, variable manufacturing overhead was $5.00 per machine-hour and the estimated total fixed manufacturing overhead was $500,000. The predetermined overhead rate for the recently completed year was closest to_. The manufacturing overhead cost applied to Work in Process was based on the calculated POR and actual machine hours of 1,000. The actual total manufacturing overhead incurred was $60,000. The company has completed with their production and had a balance of $5,000 at the beginning of the month within Finished Goods and at the end of production had a balance of $1,000 within Finished Goods.

Explanation / Answer

Publix Data Given Particulars Beginning of Month End of the month Purchase during Month Trf.to WIP Raw Material 20000 1000 45000                   -10,000 WIP 5000 10000 10000 Finished Goods 5000 1000 Direct Labour cost 35000 Calculation of pre-determined overhead rate Estimated machine hours 10000 in hours Variable manufacturing overhead cost per hour 5 in $ Total Variable manufacturing overhead 50000 in $ Total Fixed manufacturing overhead cost 500000 in $ Estimated machine hours 10000 in hours Fixed manufacturing overhead per hour 50 in $ Predetermined overhead rate = 5 + 50 = $55 per hour Answer 1 - Raw material available to be trf to WIP Particulars In $ Balance at the beginning 20000 (+) Puchases 45000 (-) Balance at the end 1000 Raw Material consumed 64000 Answer 2 - Cost of goods manufactured Raw Material consumed 64000 Direct labour cost 35000 Manufacturing Overhead 60000 Total Factory cost 159000 (+ ) WIP at the beginning 5000 (-) WIP at the end 10000 Cost of Goods Manufactured 154000 Answer 3 - Cost of goods sold Cost of Goods Manufactured 154000 (+ ) Finished goods at the beginning 5000 (-) Finished Goods at the end 1000 Cost of Goods Sold 158000 Answer 4 Total manufacturing overhead applied for the month = $55 * 1000 hours = $55000 However the actual manufacturing overhead incurred for the month = $60000 Hence Manufacturing overhead under applied to the tune of $5000 Answer 5 Indirect material amount of $5000 must be posted to Manufacturing overhead account

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