Can you please work this out as well? I am not sure if my numbers are correct! R
ID: 2481399 • Letter: C
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Can you please work this out as well? I am not sure if my numbers are correct!
Ravs ten Com pany uses a job-order costing system The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 35,000 machine-hours and incur $183,750 in manufacturing overhead cost. The following transactions occurred during the year: a. b. Raw materials requisitioned for use in production, $309,000 (70% direct and 30% indirect). The following costs were incurred for employee services: Direct labor Indirect labor Sales commissions Administrative salaries $ 180,000 $ 38,000 $ 30,000 $ 45,000 c. Heat, power, and water costs incurred in the factory, $67,000 d. Insurance costs, $30,000 (80% relates to factory operations, and 20% relates to selling and administrative activities). e. Advertising costs incurred, $70,000 Depreciation recorded for the year, $80,000 (75% relates to factory operations, and 25% relates to selling and administrative activities). g. The company used 60,000 machine-hours during the year h. Goods that cost $500,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse i. Sales for the year totaled $740,000. The total cost to manufacture these goods according to their job cost sheets was $495,000 Required 1. Determine the underapplied or overapplied overhead for the year. (Round your intermediate calculations to two decimal places.) Overhead overapplied$ 33,300Explanation / Answer
Answer a. Calculation of Actual MOH Indirect Material ($309,000 X 30%) 92,700.00 Indirect Labor 38,000.00 Factory Heat, power & Water costs 67,000.00 Factory Insurance costs ($30000 X 80%) 24,000.00 Factory Dep. ($80000 X 75%) 60,000.00 Total Actual MOH 281,700.00 Applied MOH - $183750 X 60000 / 35000 315,000.00 Calculation of Overapplied Overhead Actual MOH 281,700.00 Applied MOH 315,000.00 Overapplied Overhead 33,300.00 Answer b. Calculation of Adjusted Cost of Goods Sold Unadjusted COGS 495,000 Less: Overapplied Overhead (33,300) Adjusted COGS 461,700 Selling & Admn. Expenses Sales Commissions 30,000 Administrative Salaries 45,000 Insurance ($30000 X 20%) 6,000 Advt. Costs 70,000 Dep. ($80000 X 25%) 20,000 Total Selling & Admn. Exp. 171,000 Ravsten Company Income Statement For the year ended Dec. 31 Sales 740,000 Less: COGS (461,700) Gross Margin 278,300 Less: Selling & Admn Exp. (171,000) Net Operating Income 107,300
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