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:

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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

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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