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Gitano Products uses job-order costing and applies overhead cost to jobs based on direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $139,500 of manufacturing overhead for an estimated allocation base of $93,000 direct material dollars to be used in production. The company 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 I Work in Process Finished Goods Beginning $ 26,000 $ 47,000 $ 73,000 $ 137,000 $ 89,000 $ 143,300 $8,000 $ 17,000 $ 16,000 $9,600 $ 33,000 Ending $ 14,000 $ 37,000 $ 55,000 Required: 1. Compute the predetermined overhead rate. 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. 5. Assume the $37,000 ending balance in Work in Process includes $8,300 of direct materials. Given this assumption, supply the information missing below:

Gitano Products uses job-order costing and applies overhead cost to jobs based on direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $139,500 of manufacturing overhead for an estimated allocation base of $93,000 direct material dollars to be used in production. The company 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 I Work in Process Finished Goods Beginning $ 26,000 $ 47,000 $ 73,000 $ 137,000 $ 89,000 $ 143,300 $8,000 $ 17,000 $ 16,000 $9,600 $ 33,000 Ending $ 14,000 $ 37,000 $ 55,000 Required: 1. Compute the predetermined overhead rate. 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. 5. Assume the $37,000 ending balance in Work in Process includes $8,300 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
Problem 1Q
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Gitano Products uses job-order costing and applies overhead cost to jobs based on direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $139,500 of manufacturing overhead for an estimated allocation base of $93,000 direct material dollars to be used in production. The company 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 $ 26,000 $ 47,000 $ 73,000 $ 137,000 $ 89,000 $ 143,300 $ 8,000 $ 17,000 $ 16,000 $ 9,600 $ 33,000 Ending $ 14,000 $ 37,000 $ 55,000 Required: 1. Compute the predetermined overhead rate. 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. 5. Assume the $37,000 ending balance in Work in Process includes $8,300 of direct materials. Given this assumption, supply the information missing below:
Transcribed Image Text:Gitano Products uses job-order costing and applies overhead cost to jobs based on direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $139,500 of manufacturing overhead for an estimated allocation base of $93,000 direct material dollars to be used in production. The company 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 $ 26,000 $ 47,000 $ 73,000 $ 137,000 $ 89,000 $ 143,300 $ 8,000 $ 17,000 $ 16,000 $ 9,600 $ 33,000 Ending $ 14,000 $ 37,000 $ 55,000 Required: 1. Compute the predetermined overhead rate. 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. 5. Assume the $37,000 ending balance in Work in Process includes $8,300 of direct materials. Given this assumption, supply the information missing below:
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