Nautical Footware Inc. manufactures womens boating shoes. Manufacturing overhead is assigned to production on a machine-hour basis.

Question:

Nautical Footware Inc. manufactures women’s boating shoes. Manufacturing overhead is assigned to production on a machine-hour basis. For 2019, it was estimated that manufacturing overhead would total $487,200 and that 33,600 machine hours would be used.


Required:

a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2019.

b. During May, 5,860 pairs of shoes were made. Raw materials costing $28,468 were used, and direct labor costs totaled $28,800. A total of 2,840 machine hours were worked during the month of May. Calculate the cost per pair of shoes made during May.

c. At the end of May, 1,578 pairs of shoes were in ending inventory. Calculate the cost of the ending inventory and the cost of the shoes sold during May.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Accounting What the Numbers Mean

ISBN: 978-1260565492

12th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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