Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $465,800, and management budgeted 34,000 direct labor-hours. The company had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April: April insurance cost for the manufacturing property and equipment was $1,850. The premium had been paid in January. Recorded $1,060 depreciation on an administrative asset. Purchased 21 pounds of high-grade polishing materials at $16 per pound (indirect materials). Paid factory utility bill, $6,550, in cash. Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs. Incurred and paid other factory overhead costs, $6,300. Purchased $25,000 of materials. Direct materials included unpolished semiprecious stones and gold. Indirect materials included supplies and polishing materials. Requisitioned $19,000 of direct materials and $1,700 of indirect materials from Materials Inventory. Incurred miscellaneous selling and administrative expenses, $5,800. Incurred $3,610 depreciation on manufacturing equipment for April. Paid advertising expenses in cash, $2,725. Applied factory overhead to production on the basis of direct labor hours. Completed goods costing $64,500 during the month. Made sales on account in April, $58,620. The Cost of Goods Sold was $48,700.

Name: Dream Makers is a small manufacturer of gold and platinum jewelry. It
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Description: Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $465,800, and management budgeted 34,000 direct labor

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $465,800, and management budgeted 34,000 direct labor-hours. The company had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April:

April insurance cost for the manufacturing property and equipment was $1,850. The premium had been paid in January.
Recorded $1,060 depreciation on an administrative asset.
Purchased 21 pounds of high-grade polishing materials at $16 per pound (indirect materials).
Paid factory utility bill, $6,550, in cash.
Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs.
Incurred and paid other factory overhead costs, $6,300.
Purchased $25,000 of materials. Direct materials included unpolished semiprecious stones and gold. Indirect materials included supplies and polishing materials.
Requisitioned $19,000 of direct materials and $1,700 of indirect materials from Materials Inventory.
Incurred miscellaneous selling and administrative expenses, $5,800.
Incurred $3,610 depreciation on manufacturing equipment for April.
Paid advertising expenses in cash, $2,725.
Applied factory overhead to production on the basis of direct labor hours.
Completed goods costing $64,500 during the month.
Made sales on account in April, $58,620. The Cost of Goods Sold was $48,700.

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overhead
Req 4 COGM Req 4 COGS
Calculate the amount of overapplied or underapplied overhead on April 30.
Req 5
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