Manufacturing overhead applied a b 666250 5 the total

This preview shows page 2 - 5 out of 10 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Managerial Accounting: The Cornerstone of Business Decision-Making
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 10-77
Managerial Accounting: The Cornerstone of Business Decision-Making
Hansen/Mowen
Expert Verified
Manufacturing overhead applied (a) × (b) ............................... $666,250 5. The total manufacturing cost added to work in process is: Raw materials used in production ......................................... $ 480,000 Direct labor ............................................................................. 600,000 Manufacturing overhead applied ........................................... 666,250 Total manufacturing cost ....................................................... $1,746,250 6. The journal entry is recorded as follows: Finished Goods ............................. 1,680,000 Work in Process ............... 1,680,000 7. The ending balance in Work in Process is computed as follows: Work in Process Beg. Bal. 18,000 (b) 480,000 (c) 600,000 (f) 666,250 (g) 1,680,000 End. Bal. 84,250 8. The total actual manufacturing overhead cost is as follows: Indirect labor ....................................................................... $150,000 Depreciation, insurance, utilities, etc. ................................ 500,000 Total actual manufacturing overhead cost ......................... $650,000 9. The overapplied overhead is computed as follows: Actual manufacturing overhead cost (a) ................................. $650,000 Manufacturing overhead applied (b) ...................................... $666,250
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Managerial Accounting: The Cornerstone of Business Decision-Making
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 10-77
Managerial Accounting: The Cornerstone of Business Decision-Making
Hansen/Mowen
Expert Verified
Overapplied overhead (a) (b) ............................................... $(16,250) 10. The cost of goods available for sale is computed as follows: Beginning finished goods inventory ...................................... $ 35,000 Add: Cost of goods manufactured .......................................... 1,680,000 Cost of goods available for sale .............................................. $1,715,000 11. The journal entry is recorded as follows: Cost of Goods Sold .................................... 1,690,000 Finished Goods ..................................... 1,690,000 12. The ending balance in Finished Goods is: Finished Goods Beg. Bal. 35,000 (g) 1,680,000 (h) 1,690,000 End. Bal. 25,000 13. The adjusted cost of goods sold is computed as follows: Beginning finished goods inventory ....................................... $ 35,000 Cost of goods manufactured .................................................... 1,680,000 Cost of goods available for sale ............................................... 1,715,000 Ending finished goods inventory ............................................ 25,000 Unadjusted cost of goods sold ................................................. 1,690,000 Overapplied overhead .............................................................. (16,250) Adjusted cost of goods sold ..................................................... $1,673,750 14. and 15. The gross margin and net operating income are computed as follows: Sales ................................................................................... $2,800,000 Cost of goods sold .............................................................. 1,673,750 Gross margin ..................................................................... 1,126,250 Selling and administrative expenses ($240,000 + $367,000) ...................................................................... 607,000 Net operating income ........................................................ $ 519,250 Note: The selling and administrative expenses ($607,000) include selling and administrative salaries ($240,000) and various other selling and administrative expenses ($367,000).
3-4 Osborn Manufacturing uses a predetermined overhead rate of $18.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $218,400 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company actually incurred $215,000 of manufacturing overhead and 11,500 direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assume that the company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company’s gross margin? By how much?
2. Because manufacturing overhead is underapplied, the journal entry would increase cost of goods sold by $5,700 and the gross margin would decrease by $5,700.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture