cost to jobs d rate was based on a cost formula that on the basis of direct labo
ID: 2523647 • Letter: C
Question
cost to jobs d rate was based on a cost formula that on the basis of direct labor cost. Its predetermined $145,500 of for an base of $97,000 direct labor s. The company the S47,000 20,000 $ 63,000 $ 45,000 89,000 $ 70,000 Raw ma $148,000 $ 92,000 Direct labor cost Actual manufacturing overhead costs: $ 10,600 S 18,800 S 34,500 $ 10,300 S 22,000 S 45,000 nce, factory of equipment Indirect labor Property taxes Maintenance Rent, building Required 1-a. Compute the predetermined overhead rate for the year. % of direct labor cost 1-b. Compute the amount of underapplied or overapplied overhead for the yearExplanation / Answer
Predetermined overhead rate = 145500/97000 150% Schedule for manufacturing cost beginning raw material 47000 Add Purchase of raw material 148000 Total 195000 Less Ending Raw material 20000 Raw material used in production 175000 Direct labor 92000 manufacturing cost applied 138000 (92000*150%) Total manufacturing cost 405000 Add Beginning work in progress 63000 468000 less Ending work in progress 45000 Cost of goods manufactured 423000 Add Beginning finished goods inventory 89000 Cost of goods available for sale 512000 Less Ending finished goods inventory 70000 unadjusted Cost of goods sold 442000 Add Under applied overheads 3200 Cost of goods sold 438800 Actual manufacturing overheads Insurance factory 10600 Depreciation of equipment 18800 Indirect labor 34500 Property taxes 10300 Maintenace 22000 Rent building 45000 Total actual manufacturing overheads 141200 Manufacturing overheads applied 138000 Under applied overheads 3200 4 Direct material 5100 Direct labor 6700 Manufacturing overheads 10050 (6700*150%) Total 21850 Margin 8740 (21850*40%) Sales price 30590 5 Direct material 18750 Direct labor 10500 Manufacturing overheads 15750 (10500*150%) Total 45000
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