Problem 3-14 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 $119,600 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: $ 134,000 88,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor $ 111,700 8,200 16,000 16,000 7,700 37,000 Property taxes Depreciation of equipment Maintenance Insurance Rent, building Beginning $ 29,000 $ 15,000 $ 46,000 $ 36,000 $ 74,000 $ 57,000 Ending Raw Materials Work in Process Finished Goods 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 $36,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the information missing below: Required 2 Required 1 Required 3 Required 4 Required 5 Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Gitano Products Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production Total manufacturing costs Cost of goods manufactured Required 2 Required 4
Problem 3-14 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 $119,600 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: $ 134,000 88,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor $ 111,700 8,200 16,000 16,000 7,700 37,000 Property taxes Depreciation of equipment Maintenance Insurance Rent, building Beginning $ 29,000 $ 15,000 $ 46,000 $ 36,000 $ 74,000 $ 57,000 Ending Raw Materials Work in Process Finished Goods 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 $36,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the information missing below: Required 2 Required 1 Required 3 Required 4 Required 5 Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Gitano Products Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production Total manufacturing costs Cost of goods manufactured Required 2 Required 4
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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COMPLETE QUESTIONS 3, 4 and 5. I have already completed the first two questions. The answer to the first question is= predetermined overhead rate is 130%. The answer to the second question is= underapplied over head by $4200.
![Problem 3-14 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
$119,600 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:
$ 134,000
88,000
Purchase of raw materials
Direct labor cost
Manufacturing overhead costs:
Indirect labor
$ 111,700
8,200
16,000
16,000
7,700
37,000
Property taxes
Depreciation of equipment
Maintenance
Insurance
Rent, building
Beginning
$ 29,000 $ 15,000
$ 46,000 $ 36,000
$ 74,000 $ 57,000
Ending
Raw Materials
Work in Process
Finished Goods
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 $36,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the
information missing below:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8aeb4c9c-8d33-4b47-954d-a4d3ce02aa40%2F02a9cb5a-8028-482b-a1e3-1a414d55eecc%2Fdrehr5h.png&w=3840&q=75)
Transcribed Image Text:Problem 3-14 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
$119,600 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:
$ 134,000
88,000
Purchase of raw materials
Direct labor cost
Manufacturing overhead costs:
Indirect labor
$ 111,700
8,200
16,000
16,000
7,700
37,000
Property taxes
Depreciation of equipment
Maintenance
Insurance
Rent, building
Beginning
$ 29,000 $ 15,000
$ 46,000 $ 36,000
$ 74,000 $ 57,000
Ending
Raw Materials
Work in Process
Finished Goods
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 $36,000 ending balance in Work in Process includes $8,200 of direct materials. Given this assumption, supply the
information missing below:
Transcribed Image Text:Required 2
Required 1
Required 3
Required 4
Required 5
Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct
materials.
Gitano Products
Schedule of Cost of Goods Manufactured
Direct materials:
Total raw materials available
Raw materials used in production
Total manufacturing costs
Cost of goods manufactured
Required 2
Required 4
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