Required . Compute the predetermined overhead rate for the year. 2. Compute the

Question

Required . 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 materials. 4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. 5. Assume that the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the information missing below: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4Required 5 Assume that the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the information missing below: Direct materials Direct labor Manufacturing overhead Work in process inventory

Explanation / Answer

Solution 1:

Estimated manufacturing Overhead = $800,000

Estimated use of direct material in dollars = $500,000

Predetermined Overhead rate = $800,000 / $500,000 = 160% of Direct Material Used in production

Solution 2:

Raw material Used in production = Bignning raw Materials Inventory + Raw Material Purchases - Ending Raw Material inventory

= $20,000 + $510,000 - $80,000 = $450,000

Applied Manufacturing Overhead = Raw material used in production * Predetermined Overhead rate

= $450,000*160% = $720,000

Actual Manufacturing overhead = $170,000+ $48,000 + $260,000+ $95,000 + $7,000 + $180,000 = $760,000

Underapplied Overhead = Actual overhead - Applied Overhead = $760,000 -$720,000 = $40,000 underapplied

Solution 3:

Solution 4:

Solution 5:

Ending Work in process = $70,000

Direct materials inclueded in Ending WIP = $24,000

Applied Manufacturing Overhead in Ending WIP = $24000*160% = $38,400

Direct labor cost in Ending WIP = Ending WIP - Direct material - Manufacturing Overhead

= $70,000 - $24,000- $38,400 = $7,600

Schedule of cost of goods manufactured Particulars Amount Direct Material Used: Beginning inventory of Raw material $20,000.00 Add: Purchases of raw material $510,000.00 Less: Ending inventory of raw material $80,000.00 Direct material used $450,000.00 Direct Labor $90,000.00 Manufacturing overhead $720,000.00 Total manufacturing cost incurred during the year $1,260,000.00 Add: Beginning WIP $150,000.00 Total manufacturing cost to be accounted for $1,410,000.00 Less: Closing WIP $70,000.00 Cost of goods manufactured $1,340,000.00

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