Chapter 4, Problem 49P

1.

To determine

Calculate the predetermined factory overhead rate.

Explanation of Solution

Predetermined factory overhead rate: Predetermined factory overhead cost are applied or allocated to cost of job based on predetermined factory overhead rate.

Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to sell the goods during the given period.

Calculate the total direct labor cost.

$\begin{array}{c}\text{Total direct labor cost}=\left(\begin{array}{l}\text{Labor hour used}\left(\text{Job X13}\right)\\ +\text{Labor hour used}\left(\text{Job X14}\right)\\ +\text{Labor hour used}\left(\text{Job X15}\right)\end{array}\right)\times \left(\begin{array}{l}\text{Labor cost}\\ \text{per hour}\end{array}\right)\\ =\left(3,500+2,800+1,600\right)\times \$30\\ =\$237,000\end{array}$

Calculate overhead applied.

$\begin{array}{c}\text{Ovehead application rate}=\frac{\text{Overhead applied}}{\text{Total direct labor cost}}\\ =\frac{\$900,600}{\$237,000}\\ =380\%\end{array}$

Therefore, the predetermined factory overhead rate is 380%.

2.

To determine

Calculate the direct material amount.

Explanation of Solution

Calculate the direct material amount.

Particulars	Amount($)
Beginning material inventory	36,500
Add: Purchase	55,000
Less: Material used	54,600
Ending balance in material inventory	36,900

Table (1)

Therefore, the direct material amount is $36,900.

3.

To determine

Calculate the actual factory overhead cost incurred.

Explanation of Solution

Calculate the actual factory overhead cost incurred.

Particulars	Amount($)
Indirect labor	207,000
Rent	131,500
Utility	180,600
Repairs and maintenance	188,500
Depreciation	131,100
Other	56,000
Actual factory overhead	894,700

Table (2)

Therefore, the actual factory overhead cost incurred is $894,700.

4.

To determine

Calculate the ending balance of the work-in-process inventory account.

Explanation of Solution

Calculate the ending balance of the work-in-process inventory account.

Particulars	Job X14	Job X15	Total
Direct material	24,220	14,000	38,220
Direct labor	84,000	48,000	132,000
Applied overhead	319,200	182,400	501,600
Ending balance of work-in-process inventory	427,420	244,400	671,820

Table (3)

5.

To determine

Prepare statement of cost of goods manufactured.

Explanation of Solution

Prepare statement of cost of goods manufactured.

H Company
Statement of Cost of Goods Manufactured
For the Month End July 31.
Particulars	Amount ($)
Direct materials used	54,600
Direct labor	237,000
Factory overhead applied	900,600
Total current manufacturing costs	1,192,200
Add: Beginning work-in-process inventory	41,000
Total manufacturing cost to account for	1,233,200
Less: Ending work-in-process inventory	-671,820
Cost of goods manufactured	561,380

Table (4)

Therefore, the statement of cost of goods manufactured is $561,380.

6.

To determine

Calculate the amount of overapplied or underapplied overhead.

Explanation of Solution

Calculate the amount of overapplied or underapplied overhead.

Particulars	Amount ($)
Actual factory overhead cost	894,700
Total factory overhead applied	900,600
Overapplied overhead	-5,900

Table (5)

Therefore, the amount of overapplied or underapplied overhead is -$5,900.

7.

To determine

Compute the cost per unit of Job X13, if it has a total of 100 units.

Explanation of Solution

Compute the cost per unit of Job X13, if it has a total of 100 units.

Particulars	Amount ($)
Cost of goods manufactured (a)	561,380
Number of units (b)	100
Cost per unit (a/b)	5,613.80

Table (6)

Therefore, the cost per unit of Job X13 is $5,613.80.

8.

To determine

Prepare statement of cost of goods sold.

Explanation of Solution

Prepare statement of cost of goods sold.

H Company
Statement of Cost of Goods Sold
For the Month Ended July 31.
Particulars	Amount ($)
Finished goods beginning balance
Cost of goods manufactured	561,380
Cost of goods available for sale	561,380
Finished goods ending balance
Cost of goods sold	561,380
Overapplied overhead	-5,900
Cost of goods sold	555,480

Table (7)

Therefore, the cost of goods sold is $555,480.