1.a. Compute the predetermined overhead rate for the yearb. Compute the amount of under-or over-applied overhead for the year.1.Prepare the statement of cost of goods manufactured for the year.2.Compute the Cost of Goods Sold for the year. (Do not include the under-or over-applied overhead in the cost of goods sold.
1.a. Compute the predetermined overhead rate for the yearb. Compute the amount of under-or over-applied overhead for the year.1.Prepare the statement of cost of goods manufactured for the year.2.Compute the Cost of Goods Sold for the year. (Do not include the under-or over-applied overhead in the cost of goods sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Problem #4:Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased.) In computing a predetermined overhead rate at the beginning of the year, the company’s estimates were: manufacturing overhead cost , $800,000; and direct materials to be used in production, $500,000. The company has provided the following data :BeginningEndingRaw materials$20,000$80,000Work in Process150,00070,000Finished Goods260,000400,000The following actual costs were incurred during the year:Purchase of direct raw materials $510,000Direct labor cost90,000Manufacturing overhead costs:
4Indirect labor170,000Property taxes48,000Depreciation-equipment260,000Maintenance95,000Insurance7,000Rent -Building180,000Required: 1.a. Compute the predetermined overhead rate for the yearb. Compute the amount of under-or over-applied overhead for the year.1.Prepare the statement of cost of goods manufactured for the year.2.Compute the Cost of Goods Sold for the year. (Do not include the under-or over-applied overhead in the cost of goods sold.) What options are available for disposing of under-or over-applied overhead?3.Job 215 was started and completed during the year. What price would have been charged to customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the job’s cost to absorb period cost as well as provide for profit?4.If direct materials made up $24,000 of the ending work in process inventory balance. How much is the direct labor cost and the manufacturing overhead?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education