1. Cost Flow Relationships

The following information is available for the first month of operations of Kellman Inc., a manufacturer of art and craft items:

Sales	$3,600,000
Gross profit	650,000
Indirect labor	216,000
Indirect materials	120,000
Other factory overhead	45,000
Materials purchased	1,224,000
Total manufacturing costs for the period	2,640,000
Materials inventory, end of period	98,800

Using this information, determine the following missing amounts:

a. Cost of goods sold	$
b. Direct materials cost	$
c. Direct labor cost	$

2.

Predetermined Factory Overhead Rate

Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:

Disposable supplies		$299,600
Depreciation expense		75,000
Utilities		32,000
Nurse salaries		278,500
Technician wages		126,900
	Total operating room overhead	$812,000

The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.

a. Determine the predetermined operating room overhead rate for the year. $ ? per hour

b. Bill Harris had a five-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (a)? $ ?

c. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67,250. Determine the overapplied operating overhead or underapplied operating overhead for the period. $ ? overapplied