ter 3 Gitano Products operates a job-order costing system and applies overhead c
ID: 2336372 • Letter: T
Question
ter 3 Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was $108,000 of manufacturing overhead for an estimated allocation base of $90,000 direct material dollars to be used in producti company has provided the following data for the just completed year: based on a cost formula that es Purchase of rav naterials Direct labor cost Manufacturing overhead coatsi 138,000 86,000 Indirect labor Property taxes Depreciation of equipment $ 98.100 5 8,200 19,000 15.000 $ 7,700 $35,000 Rent, bailding Raw Materials Mork in Process rinished Goods 5 30,000 $ 18.000 $ 47,000 39,000 69,000 61,000 Required: 1 Compute the predetermined overhead rate for the year 2. Compute the amount of underapplied or overapplied overhead for the year 3 Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct mate 4 Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your ans 5. Assume that the $39,000 ending balance in Work in Process includes $8,300 of direct materials. Given this assumption, suppls information missing below Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3Required 4 Required S Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer K Prev 6 of6l NextExplanation / Answer
Requirment 1
Predetermined Overhead Rate =Estimated total manufacturing overhead /Estimated total amount of the allocation Base
=108000/90000
=120% of Direct Material
Requirment 2
Actual Overhead =(98100+8200+19000+15000+7700+35000)=183000
Ovehead Applied =120% of Direct Material
Direct Raw material used =openning Raw Material +Purchase -Idirect material-Closing Rawmaterial
=30000+138000-18000=150000
Ovehead Applied=150000*120%=180000
Ovehead Under Applied =183000-180000=$3000
Requirment 3
Requirment 4
Requirment 5
Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning 30000 Add purchases of raw material 138000 Total raw materials available 168000 Deduct raw materials inventory, ending 18000 Raw materials used in production 150000 Direct labor 86000 Manufacturing overhead applied to work in process 180000 Total manufacturing cost 416000 Add: Work in process, beginning 47000 463000 Deduct: Work in process, ending 39000 Cost of goods manufactured 424000Related Questions
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