Hello, I am working on homework below, but I am unsure of how to solve it. I wou
ID: 2411366 • Letter: H
Question
Hello, I am working on homework below, but I am unsure of how to solve it. I would be grateful for help in solving it. In addition, the option $50,000 is part of question 1 and the option $1,600,000 is part of question 7, the margins just got a little bit out of place when I was typing.
1. Sheridan Company has $27000 of ending finished goods inventory as of December 31, 2013. If beginning finished goods inventory was $21000 and cost of goods sold was $56000, how much would Sheridan report for cost of goods manufactured?
2
6. A company expected its annual overhead costs to be $1500000 and direct labor costs to be $600000. Actual overhead was $1200000, and actual labor costs totaled $800000. How much is the company’s predetermined overhead rate to the nearest cent?
8.
$83000Explanation / Answer
(1)
Ending Inventory
27000
(+) COGS
56000
(-) Beginning Inventory
21000
Cost of goods manufactured
62000
(2)
Direct Material
250000
(+) Direct Labour
200000
(+) Manufacturing O/H
250000
(+) Beginning WIP
40000
(-) Ending WIP
20000
Total Manufacturing Cost
720000
(+) Beginning FG
50000
(-) Ending FG
30000
Cost of goods manufactured
740000
720000 & 740000
(3) Journal Entry
Finished goods Inventory Dr
WIP Inventory Cr
(4)
DM
70000
(+) DL
130000
(+) Manufacturing O/H
60000
Total cost
260000
Units mfr
5000
Unit cost (260000/5000)
52
Finished goods cost = 1000 * 52 = 52000
(5)
Cost of goods mfr
90000
(+) Beginning FG inventory
5000
(-) Ending FG inventory
7500
Cost of goods sold
87500
(6) Predetermined O/H rate = Budget OH/Budget labour cost
= 1500000/600000 = 2.5
(7) Predetermined rate = Budget OH/Budget hrs
= 1600000/500000 = 3.2
Applied O/H = Rate * Actual Hrs
= 3.2 * 390000 = 1248000
Under/Over applied of O/H = Actual O/H – Applied O/H
= 1575000 – 1248000 = 327000 Underapplied
(8)
Completed & Transfered
84700
Ending WIP (50800 * 20%)
10160
Equivalent Units
94860
Ending Inventory
27000
(+) COGS
56000
(-) Beginning Inventory
21000
Cost of goods manufactured
62000
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