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). Its predetermined overhead rate was based on a cost formula that estimat $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building Raw Materials Work in Process Finished Goods Beginning $ 20,000 $ 150,000 $ 260,000 $ 510,000 $ 90,000 $170,000 $ 48,000 $ 260,000 $ 95,000 $ 7,000 $ 180,000 Ending $ 80,000 $70,000 $ 400,000
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). Its predetermined overhead rate was based on a cost formula that estimat $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building Raw Materials Work in Process Finished Goods Beginning $ 20,000 $ 150,000 $ 260,000 $ 510,000 $ 90,000 $170,000 $ 48,000 $ 260,000 $ 95,000 $ 7,000 $ 180,000 Ending $ 80,000 $70,000 $ 400,000
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
Requirements 1-5
![Purchase of raw materials
Direct labor cost
Problem 3-14 (Static) Schedule of Cost of Goods Manufactured; Overhead Analysis [LO3-3, LO3-4]
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). Its predetermined overhead rate was based on a cost formula that estimated
$800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production.
The company has provided the following data for the just completed year:
Manufacturing overhead costs:
Indirect labor
Property taxes
Depreciation of equipment
Maintenance
Insurance
Rent, building
Raw Materials
Work in Process
Finished Goods
Beginning
$ 20,000
$ 150,000
$ 260,000
$ 510,000
$ 90,000
$170,000
$ 48,000
$ 260,000
$ 95,000
$ 7,000
$ 180,000
Ending
$ 80,000
$70,000
$ 400,000
Saved
Required:
1. Compute the predetermined overhead rate for the year.
2. Compute the amount of underapplied or overapplied overhead for the year.
3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.
4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.
5. Assume that the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the
information missing below:
Complete this question by entering your answers in the tabs below.
< Prev
Help
3 of 3
Next](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F48b182fb-7742-4a35-87d7-02f8d185903c%2F1119c359-94f0-43b3-9ea8-70c66ede38af%2F9yizlm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Purchase of raw materials
Direct labor cost
Problem 3-14 (Static) Schedule of Cost of Goods Manufactured; Overhead Analysis [LO3-3, LO3-4]
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). Its predetermined overhead rate was based on a cost formula that estimated
$800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production.
The company has provided the following data for the just completed year:
Manufacturing overhead costs:
Indirect labor
Property taxes
Depreciation of equipment
Maintenance
Insurance
Rent, building
Raw Materials
Work in Process
Finished Goods
Beginning
$ 20,000
$ 150,000
$ 260,000
$ 510,000
$ 90,000
$170,000
$ 48,000
$ 260,000
$ 95,000
$ 7,000
$ 180,000
Ending
$ 80,000
$70,000
$ 400,000
Saved
Required:
1. Compute the predetermined overhead rate for the year.
2. Compute the amount of underapplied or overapplied overhead for the year.
3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.
4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.
5. Assume that the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the
information missing below:
Complete this question by entering your answers in the tabs below.
< Prev
Help
3 of 3
Next
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 3 steps with 1 images
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