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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 $128,800 of manufacturing overhead for an estimated allocation base of $92,000 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 $ 27,000 $ 46,000 $ 69,000 $ 138,000 $ 88,000 $ 133, 100 $ 8,900 $ 18,000 $ 14,000 $ 8,600 $ 34,000 Ending $ 13,000 $ 38,000 $ 56,000 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 $38,000 ending balance in Work In Process Includes $8,400 of direct materials. Given this assumption, supply the information missing below:

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 $128,800 of manufacturing overhead for an estimated allocation base of $92,000 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 $ 27,000 $ 46,000 $ 69,000 $ 138,000 $ 88,000 $ 133, 100 $ 8,900 $ 18,000 $ 14,000 $ 8,600 $ 34,000 Ending $ 13,000 $ 38,000 $ 56,000 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 $38,000 ending balance in Work In Process Includes $8,400 of direct materials. Given this assumption, supply the information missing below:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 $128,800 of manufacturing overhead for an estimated allocation base of $92,000 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 $ 27,000 $ 46,000 $ 69,000 Required 1 Required 2 Compute the predetermined Predetermined overhead rate $ 138,000 $ 88,000 $ 133, 100 $ 8,900 $ 18,000 $ 14,000 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 $38,000 ending balance in Work In Process Includes $8,400 of direct materials. Given this assumption, supply the information missing below: $ 8,600 $ 34,000 Complete this question by entering your answers in the tabs below. %6 Ending $ 13,000 $ 38,000 $ 56,000 Required 3 Required 4 overhead rate for the year. < Required 1 Required 5 Required 2 >
Transcribed Image Text: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 $128,800 of manufacturing overhead for an estimated allocation base of $92,000 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 $ 27,000 $ 46,000 $ 69,000 Required 1 Required 2 Compute the predetermined Predetermined overhead rate $ 138,000 $ 88,000 $ 133, 100 $ 8,900 $ 18,000 $ 14,000 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 $38,000 ending balance in Work In Process Includes $8,400 of direct materials. Given this assumption, supply the information missing below: $ 8,600 $ 34,000 Complete this question by entering your answers in the tabs below. %6 Ending $ 13,000 $ 38,000 $ 56,000 Required 3 Required 4 overhead rate for the year. < Required 1 Required 5 Required 2 >
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