Dobson Manufacturing Company uses a job order cost system with manufacturing ove

Question

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $54,700 and its total manufacturing overhead cost to be $92,990 Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 1. Calculate the predetermined overhead rate redetermined Overhead Rate 170 % of Direct Labor Cost 2. Fill in the missing values in the T-accounts. Raw Materials Inventory Work in Process Inventory Beginning Balance Purchases Ending Balance 4,400 93,400 28,300 Beginning Balance Direct Materials Direct Labor Applied Overhead Ending Balance 29,200 69,700 S 40,700 18,600 Finished Goods Inventory Cost of Goods Sold Beginning Balance Cost of Goods Completed Ending Balance 40,800 Unadjusted Cost of Goods Sold Adjusted Cost of Goods Sold 49,200 Sales Revenue Manufacturing Overhead 9,800 14,200 12,000 5,400 1,400 10,000 52,800 309,000 Applied Overhead Indirect Materials Indirect Labor Factory Depreciation Factory Rent Factory Utilities Other Factory Costs Actual Overhead Selling, General, and Administrative Expenses Adm. Salaries Office Depreciation Advertising Ending Balance 27,400 19,300 13,500 60,200

Explanation / Answer

Answer 2 Answer 3 Fill in the missing values in T-accounts Amount overapplied overheads = Applied Overheads - Actual Overheads Raw material Inventory Amount overapplied overheads = $69190 - $52800 = $16,390 Beginning balance $14,400.00 $69,700.00 Work in process Inventory Purchases $93,400.00 $9,800.00 Manufacturing Overheads Answer 4 Ending balance $28,300.00 Statement fo cost of goods manufactured and sold DOBSON MANUFACTURING COMPANY Work in process Inventory Cost of goods Manufactured and sold report Beginning balance $29,200.00 $190,190.00 Finished Goods Inventory Raw Material Direct Materials $69,700.00 Beginning balance $14,400.00 Direct Labour $40,700.00 Add : Purchases $93,400.00 Applied Overhead $69,190.00 Less : Indirect Material Used $9,800.00 Ending balance $18,600.00 Less : Ending balance $28,300.00 Direct Materials used in Production $69,700.00 Finished Goods Inventory Direct Labour $40,700.00 Beginning balance $40,800.00 $181,790.00 Cost of goods sold Overhead applied $69,190.00 Cost of goods Completed $190,190.00 Total Current Manufacturing Cost $179,590.00 Ending balance $49,200.00 Add: Beginning Work in process Inventory $29,200.00 Total Work in proces $208,790.00 Sales Revenue Less : Ending Work in process Inventory $18,600.00 Income Summary $309,000.00 $309,000.00 Accounts Receivables Cost of goods Manufactured $190,190.00 Add : Beginning Finished Goods Inventory $40,800.00 Cost of goods Available for sale $230,990.00 Less : Ending Finished Goods Inventory $49,200.00 Manufacturing Overheads Unadjusted cost of goods sold $181,790.00 Indirect Material $9,800.00 $69,190.00 Applied Overhead Add : Overapplied Overheads $16,390.00 Indirect Labour $14,200.00 Adjusted Cost of good sold $165,400.00 Factory Depreciation $12,000.00 Factory Rent $5,400.00 Factory Utilities $1,400.00 Answer 5 Other Factory Costs $10,000.00 Brief Income Statement DOBSON MANUFACTURING COMPANY Actual Overhead $52,800.00 Income statement Sales $309,000.00 Selling General and Administrative Expenses Less : Adjusted Cost of goods sold $165,400.00 Adm.Salaries $27,400.00 $60,200.00 Income Summary Gross Margin $143,600.00 Office Depreciation $19,300.00 Less : Selling,General and administrative $60,200.00 Advertising $13,500.00 Net Income from Operations $83,400.00 Ending balance $60,200.00 Cost of goods sold Unadjusted Cost of goods sold $181,790.00 $16,390.00 Overapplied Overheads Adjusted cost of goods sold $165,400.00 Ending balance $0.00

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