Group 2 - P 21

# Group 2 - P 21 - Group 2 Problem 221 Quan Nhan Timeless...

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Group 2 Problem 2- 21 Quan Nhan

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Timeless Products uses a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in productions ( not on basis of raw materials purchased). In computing a predetermined overhead rate at the beginning of the year, the company's estimates were: manufacturing overhead cost, \$360,000; and direct materials to be used in production, \$288,000. The company has provided the following data.
Timeless Products Chart Beginnin g Ending Raw Materials \$4,000 \$39,000 Work in Process \$100,000 \$45,000 Finished Goods \$300,000 \$280,000 Purchase of raw materials (all direct) \$450,000 Direct labor cost \$65,000 Manufacturing overhead costs Insurance, factory \$4,250 Depreciation of equipment \$190,000 Indirect labor \$145,000 Property taxes \$10,000 Maintenance \$60,000 Rent, building \$94,000

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1. a. Compute the predetermined overhead rate for the year. Estimated total manufacturing overhead cost Predetermined = overhead rate Estimated total amount of the allocation base \$360,000 = \$288,000 direct materials cost = 125% of direct materials cost
1.

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