Determine and Use Overhead Rate The following selected ledger accounts of Camero

Question

Determine and Use Overhead Rate

The following selected ledger accounts of Cameron Company are for February (the second month of its accounting year):

a. Determine the amount of indirect material requisitioned for production during February.

$Answer

b. How much indirect labor cost was apparently incurred during February?

$Answer

c. Calculate the manufacturing overhead rate based on direct labor cost.

Answer%

d. Was manufacturing overhead for February under- or overapplied, and by what amount?

Manufacturing overhead was Answerover-appliedunder-applied by $Answer for February.

e. Was manufacturing overhead for the first two months of the year under- or overapplied, and by what amount?

Manufacturing overhead was Answerover-appliedunder-applied by $Answer for the first two months.

f. What is the cost of production completed in February?

$Answer

g. What is the cost of goods sold in February?

$Answer

Materials Inventory Feb. 1 balance 50,400 February credits 180,800 February debits 166,400 Manufacturing Overhead February debits 219,520 Feb. 1 balance 18,560 February credits 218,160 Work in Process Inventory Feb. 1 balance 35,840 February credits 552,000 February debits: Direct material 152,000 Direct Labor 242,400 Man. overhead 218,160 Wages Payable February debits 309,600 Feb. 1 balance 72,000 February credits 283,200 Finished Goods Inventory Feb. 1 balance 122,400 February credits 613,920 February debits 552,000

Explanation / Answer

a) Indirect material requisitioned = 180800-152000 = 28800

b) Indirect labour cost = 283200-242400 = 40800

c) Manufacturing overhead rate = 218160*100/242400 = 90% of direct labour cost

d) Under applied manufacturing overhead = 218160-219520 = 1360

e) Under applied manufacturing overhead = 1360

f) Cost of production completed = 552000

g) Cost of goods sold = 613920

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