ercise 6 Jolo Co. had the following balances and information for October. eg, fi
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ercise 6 Jolo Co. had the following balances and information for October. eg, finis edg d inventory Beg. work in process inventory $2 Beg. raw materials inventory $6 End, finished goods inventory = $6 End. work in process inventory $4 End. raw materials inventory= $10 raw material purcna ses =>4U Factory wages paid $60 inure c materials = >4 Indirect labor $14 Other overhead costs =$36 Sales-$220 Predetermined overhead rate - 200% direct materials 36 a) Cost of raw materials used equals: b) Cost of direct materials equals: c) Cost of direct labor equals: d) Manufacturing overhead applied equals: e) Total manufacturing costs equal: f) Cost of goods manufactured equals: 8) Cost of goods sold* equals: h) Gross profit equals: 32 Don't worry about over or underapplied overhead cise 7 At the beginning of 201X, YourCo. estimated total manufacturing overhead costs for the year of $260 an that direct labor costs would total $650. a) What is the predetermined overhead rate for 201X if YourCo uses DL as its allocation base? b) Job 103 had $40 direct labor. How much overhead was applied to it? c) During 201X, Your Co's actual overhead incurred totalled $312 and actual direct labor costs were $585. Was factory overhead under or over applied? d) What is the amount of under or over applied factory overhead based on the data from part C?Explanation / Answer
Exercise 6 Exercise 7 Answer a Answer a Cost of raw materials used Predetermined overhead rate = (Manufacturing overhead cost / direct labour cost)*100 Beg.raw materials inventory $6.00 Predetermined overhead rate = ($260 /$650)*100 = 40% Add : raw material purchases $40.00 Less: End.raw material inventory $10.00 Answer b Cost of raw materials used $36.00 Overhead applied to Job 103 = Predetermined overhead rate * direct labor cost of job Overhead applied to Job 103 = 40% * $40 = $16 Answer b Cost of direct materials Answer c Cost fo raw materials used $36.00 Actual manufacturing overhead incurred totalled $312 whereas estimated overhead cost is equal Less : Indirect materials $4.00 to $260.It means factory overheads are under applied. Cost of direct materials $32.00 Answer d Answer c Amount of under applied factory overhead = $312- $260 = $52 Cost direct labor i.e. factory wages paid $60.00 Answer d Manufacturing overhead applied = 200% of direct materials Manufacturing overhead applied = 200% x $32 = 64 Answer e Total manufacturing cost Cost of direct materials $32.00 Cost of direct labor $60.00 Manufacturing overhead applied $64.00 Total manufacturing cost $156.00 Answer f Cost of goods manufactured Total manufacturing cost $156.00 Add : Beg.work in process inventory $2.00 Less : End.work in process inventory $4.00 Cost of goods manufactured $154.00 Answer g Cost of goods sold Cost of goods manufactured $154.00 Add : Beg.finished goods inventory $12.00 Less : End finished goods inventory $6.00 Cost of goods sold $160.00 Answer h Gross profit = Sales - Cost of goods sold Gross profit = $220 - $160 = $60.00
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