Bakerston Company is a manufacturing firm that uses job-order costing. The compa

Question

Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year Raw materials Work in process Finished goods $ 11,700 32,000 $107,000 $ 15,200 $ 14,300 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,300 machine-hours and incur $276,800 in manufacturing overhead cost. The following transactions were recorded for the year . Raw materials were purchased, $412,000 Raw materials were requisitioned for use in production, $408,500 (S380,000 direct and $28,500 indirect) The following employee costs were incurred direct labor, $340,000, indirect labor, $71,000 and administrative salaries, $157,000. Selling costs, $114,000 Factory utility costs, $20,000 Depreciation for the year was $124.000 of which $113,000 is related to factory operations and $11,000 is related to selling, general, and administrative activities Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,400 machine-hours Sales for the year totaled $1,285,000 Required a.Prepare a schedule of cost of goods manufactured in good form (Do not round predetermined overhead rate. Input all amounts as positive values. Omit the "$" sign in your response.) Schedule of Cost of Goods Manufactured Direct materials (Click to select) (Click to select",-(Click to select) Total raw materials available (Click to select)(Click to select) Raw materials used in production (Click to select)(Click to select) (Click to select) (Click to select) Total manufacturing cost (Click to select)(Click to select) (Click to select) (Click to select) Cost of goods manufactured

Explanation / Answer

Bakerston Company

Schedule of cost of goods manufactured

Direct materials:

Raw materials - Beginning Inventory

$11,700

Add: Purchases

$412,000

Total raw materials available

$423,700

Less: raw materials - ending inventory

$15,200

Raw materials used in production

$408,500

Less: indirect materials

$28,500

Direct materials:

$380,000

Direct labor

$340,000

Manufacturing overhead applied

$232,500

Total manufacturing costs

$952,500

Add: Beginning work in process inventory

$32,000

$984,500

Less: Ending work in process inventory

$14,300

Cost of goods manufactured

$970,200

Actual manufacturing overhead cost incurred –

actual manufacturing overhead cost incurred -

indirect materials

$28,500

indirect labor

$71,000

factory utilities

$20,000

Factory Depreciation

$113,000

manufacturing overhead cost incurred

$232,500

manufacturing overhead applied

$230,400

manufacturing overhead under applied

$2,100

Note:

Predetermined manufacturing overhead rate = $276,800

Estimated machine hours = 17,300

Predetermined overhead rate = 276,800/17,300 = $16

Manufacturing overhead applied = predetermined overhead rate x cost per actual machine hour = 14,400 MHs x $16 = $230,400

Income Statement

Sales

$1,285,000

Cost of goods adjusted

$956,300

Gross margin

328,700

Less: selling and administrative costs

administrative salaries

$157,000

selling costs

$114,000

Depreciation

$11,000

total selling and administrative costs

$282,000

Net Income

$46,700

Working –

Beginning finished goods inventory

$107,000

Cost of goods manufactured

$970,200

goods available for sale

$1,077,200

Less: ending finished goods inventory

$123,000

Unadjusted cost of goods sold

$954,200

Add: underapplied overhead

$2,100

Cost of goods sold

$956,300

Schedule of cost of goods manufactured

Direct materials:

Raw materials - Beginning Inventory

$11,700

Add: Purchases

$412,000

Total raw materials available

$423,700

Less: raw materials - ending inventory

$15,200

Raw materials used in production

$408,500

Less: indirect materials

$28,500

Direct materials:

$380,000

Direct labor

$340,000

Manufacturing overhead applied

$232,500

Total manufacturing costs

$952,500

Add: Beginning work in process inventory

$32,000

$984,500

Less: Ending work in process inventory

$14,300

Cost of goods manufactured

$970,200

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