1. Compute a predetermined overhead rate. 2. Prepare schedules of cost of goods

Question

1. Compute a predetermined overhead rate.

2. Prepare schedules of cost of goods manufactured and cost of goods sold.

3. Compute underapplied or overapplied overhead cost to close the balance in Manufacturing Overhead to the appropriate accounts.

4. All answers must be entered as a formula.

C Chegg.com / M Ch03 ES-10 attempts pos > c Dezto.mheducation.com/hm.tpx?-0.81 33990108597579-1455423740135 ei A Fonts Effects Themes Margins Orientation Size Print Breaks Background Print Area Sheet Arrange Scale: 100% Titles Themes Page Setup Scale to Fit 15 1 Stanford Enterprises uses job-order costing 2 The allocation base for overhead is direct labor hours. 4 Data for the year just ended 5 Est imated total manufacturing overhe ad cost Est imated total direct labor hours Actual total direct labor hours $ 275,000 25,000 27,760 6 7 9 Actual costs for the year 10Purchase of raw materials (all direct) 11 Direct labor cost 12 Manufacturing overhead costs 13 14 Inventories: 15 Ra materials (all direct) 16 Work in process 17Finished goods 18 19 Use the data to answer the follow ing 20 211. Compute applied overhead and determ ine the amount of unde rapplied or overapplied overhead: 22 Actual manufacturing overhead cost 23 Predetermined ove rhead rate 24Actual direct labor hours 25 Manufacturing overhead applied 26 27Unde rapplied (overapplied) manufacturing overhead 28 $375,000 $536,300 $302,750 $ 15,000 11,375 $27,875 22,350 34,600 26,450 Sheet1 | | 4) +50% 11:42 PM O Ask me anything www. 10OBFSTHESIGN SCo 2/13/2016

Explanation / Answer

1. predetermined overhead rate = estimated manufacture overhead / estimated total direct labour gour

= $275000 / 25000 hours

= $11 per hour

2. cost of goods manufactured

direct material beginning 15000

add: purcashe of direct material 375000

less: direct material ending 11375   

direct material consumed 378625

add: direct material 536300

add: manufactured overhead 302750

total manufactured cost 1217675

add: opening work in progress 27875

less: closing work in progress 22350

cost of goods manufactured $1223200

   cost of goods sold:

opening finished goods 34600

add: cost of goods manufactured 1223200

less: closing finished goods 26450

cost of goods sold $1231350

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