Concept explainers
1.
Calculate the predetermined factory
1.

Explanation of Solution
Predetermined factory overhead rate: Predetermined
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.
Calculate overhead applied.
Therefore, the predetermined factory overhead rate is 380%.
2.
Calculate the direct material amount.
2.

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.
Calculate the actual factory overhead cost incurred.
3.

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 |
131,100 | |
Other | 56,000 |
Actual factory overhead | 894,700 |
Table (2)
Therefore, the actual factory overhead cost incurred is $894,700.
4.
Calculate the ending balance of the work-in-process inventory account.
4.

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.
Prepare statement of cost of goods manufactured.
5.

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.
Calculate the amount of overapplied or underapplied overhead.
6.

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.
Compute the cost per unit of Job X13, if it has a total of 100 units.
7.

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.
Prepare statement of cost of goods sold.
8.

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.
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Chapter 4 Solutions
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