Problem 2-24A Schedule of Cost of Goods Manufactured; Overhead Analysis [LO1, LO

Question

Problem 2-24A Schedule of Cost of Goods Manufactured; Overhead Analysis [LO1, LO2, LO3, LO6, LO7]

The Pacific Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct labor dollars. The company has provided the following data:

Compute the predetermined overhead rate for the year.

Compute the amount of underapplied or overapplied overhead for the year. (Input the amount as a positive value.)

Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. (Input all amounts as positive values.)

Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)

Job 137 was started and completed during the year. What price would have been charged to the customer if the job required $3,100 in materials and $4,900 in direct labor cost, and the company priced its jobs at 30% above the job’s cost according to the accounting system?

Direct labor made up $8,800 of the $37,000 ending Work in Process inventory balance. Supply the information missing below:

The Pacific Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct labor dollars. The company has provided the following data:

Explanation / Answer

Inventories Beginning Ending $ 117,000.00 Raw materials 27,000 12,000 $    90,000.00 Work in process 44,000 37,000 $              1.30 per DL $ Finished goods 72,000 56,000 Std MOH Purchase of raw materials (all direct) 140,000 Direct labor cost 86,000 1.30 $     111,800 Actual manufacturing overhead costs: Insurance, factory 11,400 Depreciation of equipment 18,000 Indirect labor 28,500 Property taxes 8,800 Maintenance 13,000 Rent, building 36,000 Actual MOH 115,700 Std MOH 111,800 Underapplied OH 3,900 Pacific Manufacturing Company Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning $   27,000 Add: Purchases of raw materials $ 140,000    Total raw materials available $ 167,000 Deduct: Raw materials inventory, ending $   12,000    Raw materials used in production $ 155,000 Direct labor $   86,000 Manufacturing overhead applied to work in process $ 111,800    Total manufacturing cost $ 352,800 Add: beginning Work in process $   44,000    $ 396,800 Deduct: ending Work in process $   37,000    Cost of goods manufactured $ 359,800 Cost of goods manufactured 359800 Add: Finished Goods beginning 72000 Less: Finished Goods Ending 56000 Unadjusted cost of goods sold 375800

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