3,466 Jack indus the following information for the month ended December 31, 20x1

Question

3,466 Jack indus the following information for the month ended December 31, 20x1: Problem! (25% stries used job-order costing and applied overhead using direct labor costs. Jack compiled Beginning Direct Materials Inventory Beginning Work-in-Process Inventory Beginning Finished Goods Inventory Ending Direct Materials Inventory Ending Work-in-Process Inventory Direct Materials Purchased 120,000 Budgeted Direct Labor 180,000 Direct Labor 250,000 Overhead Incurred 100,000 Budgeted Overhead 120,000 Ending Finished Goods Inventory 800,000 100,000 120,000 700,000 600,000 350,000 Required (show your work for partial credit and it is preferable to prepare schedules): 1) Calculate the predetermined overhead rate 2) Calculate the applied overhead 3) Calculate direct materials used 4) Calculate the cost of goods manufactured 5) Calculate the cost of goods sold

Explanation / Answer

Answer 1 Calculation of predetermined overhead rate Predetermined Overhead rate = Budgeted Overheads / Budgeted Direct Labour = $600000 / $100000 = $6 per direct labour dollar Answer 2 Applied overhead = Actual direct labour cost * Predetermined Overhead rate = $120000*$6 = $720000 Answer 3 Direct Material Used Beginning Direct Material Inventory $120,000 Add : Direct Material Purchased $800,000 Less : Ending Direct Material Inventory $100,000 Direct Material Used $820,000 Answer 4 Cost of goods Manufactured Direct Material Used $820,000 Direct Labour $120,000 Applied Overhead $720,000 Cost of Manufacture $1,660,000 Add : Beginning WIP Inventory $180,000 Less : Ending WIP Inventory $120,000 Cost of goods Manufactured $1,720,000 Answer 5 Cost of goods sold Cost of goods Manufactured $1,720,000 Add : Beginning Finished Goods Inventory $250,000 Less : Ending Finished Goods Inventory $350,000 Cost of goods sold $1,620,000

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