Reemts Company manufactures bookcases. Unit- related manufacturing overhead is applied based on the number of direct labor hours worked. Estimated unit- related manufacturing overhead for the year is $ 320,000. Employees are expected to work 40,000 direct labor hours during the year. Batch-related overhead is applied on the basis of the number of production runs. Estimated batch- related manufacturing overhead for the coming year is $ 400,000. There are 1,000 production runs planned for the year. Reemts uses a perpetual inventory system. The following events occurred during the month of April:
1. Purchased 70,000 board feet of lumber at $ 0.30 per board foot.
2. Requisitioned 50,000 board feet of lumber into production (cost $ 0.25 per board foot).
3. Indirect materials (held as supplies) in the amount of $ 4,500 were placed into production.
4. Twelve production runs producing 1,200 bookcases and requiring a total of 6,100 hours of direct labor at $ 6.00 per direct labor hour were completed during the month. Overhead is applied to production at this time.
5. Indirect labor costs incurred totaled $ 30,000.
6. Utility bill for the factory received and paid $ 600.
7. Depreciation on the factory for April, $ 6,000.
8. A bill for advertising was received, but not paid, in the amount of $ 120.
9. Other manufacturing overhead totaling $ 21,500 was incurred.
10. Bookcases with a cost of $ 75,000 were completed during the month and transferred to the finished goods warehouse.
Additional information: Balance at April 1:
Direct materials inventory $ 10,000
Work- in- process inventory 40,000
Finished goods inventory 30,000
Required
A. Calculate the predetermined overhead rates.
B. Prepare the journal entries to record the information given.
C. Determine the over-or under applied overhead, in total, for the period.
D. Prepare a cost of goods manufactured schedule.