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 $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct material dollars to be used in production. The company provided the following data for the just completed year: Purchase of raw materials $ 134,000 Direct labor cost $ 86,000 Manufacturing overhead costs: Indirect labor $ 104,900 Property taxes $ 8,500 Depreciation of equipment $ 19,000 Maintenance $ 13,000 Insurance $ 7,700 Rent, building $ 38,000 Beginning Ending Raw Materials $ 27,000 $ 17,000 Work in Process $ 45,000 $ 38,000 Finished Goods $ 68,000 $ 59,000 Required: Compute the predetermined overhead rate. Compute the amount of underapplied or overapplied overhead. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. Assume the $38,000 ending balance in Work in Process includes $8,200 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 $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct material dollars to be used in production. The company provided the following data for the just completed year: Purchase of raw materials $ 134,000 Direct labor cost $ 86,000 Manufacturing overhead costs: Indirect labor $ 104,900 Property taxes $ 8,500 Depreciation of equipment $ 19,000 Maintenance $ 13,000 Insurance $ 7,700 Rent, building $ 38,000 Beginning Ending Raw Materials $ 27,000 $ 17,000 Work in Process $ 45,000 $ 38,000 Finished Goods $ 68,000 $ 59,000 Required: Compute the predetermined overhead rate. Compute the amount of underapplied or overapplied overhead. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. Assume the $38,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the information missing below:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....
Related questions
Question
Gitano Products uses
Purchase of raw materials | $ 134,000 |
---|---|
Direct labor cost | $ 86,000 |
Manufacturing overhead costs: | |
Indirect labor | $ 104,900 |
Property taxes | $ 8,500 |
$ 19,000 | |
Maintenance | $ 13,000 |
Insurance | $ 7,700 |
Rent, building | $ 38,000 |
Beginning | Ending | |
---|---|---|
Raw Materials | $ 27,000 | $ 17,000 |
Work in Process | $ 45,000 | $ 38,000 |
Finished Goods | $ 68,000 | $ 59,000 |
Required:
- Compute the predetermined overhead rate.
- Compute the amount of underapplied or overapplied overhead.
- Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials.
- Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer.
- Assume the $38,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the information missing below:
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