Cost of goods sold if the underapplied overhead is

This preview shows page 10 - 13 out of 15 pages.

Cost of goods sold if the underapplied overhead is closed to cost of goods sold ($1,400,000 + $130,000) $ 1,530,000 Cost of goods sold if the underapplied overhead is closed to Work in Process, Finished Goods, and Cost of Goods Sold ($1,400,000 + $91,000) 1,491,000 Difference in cost of goods sold $ 39,000
Q Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 140,000 Purchases of raw materials $ 290,000 Direct labor ? Administrative expenses $ 100,000 Manufacturing overhead applied to work in process $ 285,000 Actual manufacturing overhead cost $ 270,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 40,000 $ 10,000 Work in process ? $ 35,000 Finished goods $ 50,000 ? The total manufacturing costs for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating
income was $30,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.
Cost of goods sold ($660,000 - $15,000) = $645,000 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 $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: Purchase of raw materials $ 510,000 Direct labor cost $ 90,000 Manufacturing overhead costs: Indirect labor $ 170,000 Property taxes $ 48,000 Depreciation of equipment $ 260,000 Maintenance $ 95,000 Insurance $ 7,000 Rent, building $ 180,000 Beginning Ending Raw Materials $ 20,000 $ 80,000 Work in Process $ 150,000 $ 70,000 Finished Goods $ 260,000 $ 400,000 Compute the predetermined overhead rate for the year. The predetermined overhead rate is computed as follows: Predetermined overhead rate = Estimated total manufacturing overhead cost/ Estimated total amount of the allocation base = $800,000/$500,000 = 160% Compute the amount of underapplied or overapplied overhead for the year.Before the underapplied or overapplied overhead can be computed, we must determine the amount of direct

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture