Mariya Company uses a job-order costing system and applies manufacturing overhea

Question

Mariya Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $233,450 of manufacturing overhead for an estimated allocation base of $161,000 direct material dollars. The following transactions took place during the year (all purchases and services were acquired on account) a. Raw materials purchased, $148,000. b. Raw materials requisitioned for use in production (all direct materials), $144,000. c. Utility bills incurred in the factory, $27,000. d. Costs for salaries and wages were incurred as follows: Direct labor Indirect labor Selling and administrative salaries 146,000 $ 229,000 S 63,200 e. Maintenance costs incurred in the factory, $18,500 f. Advertising costs incurred, $131,000 g. Depreciation recorded for the year, $46,000 70% relates to factory assets, and the remainder relates to selling and administrative assets) h. Rental cost incurred on buildings, $88,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration). i. Miscellaneous selling and administrative costs incurred, $12,500. j. Manufacturing overhead cost was applied to jobs, $? k. Cost of goods manufactured for the year, $570,000. l. Sales for the year (all on account totaled $1,130,00. These goods cost $545.000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were as follows: Raw materials Work in process Finished Goods $ 26,000 $ 27,000 $ 37,000

Explanation / Answer

2.

Predetermined overhead rate = $233450/$161000 = 145% of direct material dollars

3.

4.

5.

6. Price charged for Job 521: $64.09 per unit

Accounts Receivable Raw Materials Beg. Bal. 0 Beg. Bal. 26000 144000 b. l. 1130000 a. 148000 End. Bal. 1130000 End. Bal. 30000 Work in Process Finished Goods Beg. Bal. 27000 570000 k. Beg. Bal. 37000 545000 l. b. 144000 k. 570000 d. 229000 j. 208800 End. Bal. 38800 End. Bal. 62000 Manufacturing Overhead Accounts Payable Beg. Bal. 0 208800 j. Beg. Bal. 0 148000 a. c. 27000 27000 c. d. 63200 18500 e. e. 18500 131000 f. g. 32200 88000 h. h. 70400 12500 i. End. Bal. 2500 End. Bal. 425000

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