1. The company uses direct labor hours as the cost driver for manufacturing overhead application.

The company estimated the following manufacturing overhead costs for the year:

$340,000

The company estimated the following usage of direct-labor hours for the year:

170,000

2. Beginning Work-in-process, March 1 (Job 55)

$21,000

3. Beginning Finished Goods, March 1 (Job 57)

$88,000

2. Labor Information for March:

Direct-labor hours:

Job 55

5,000

Job 58

6,400

Job 59

2,600

Labor costs in factory:

Direct-labor wages

$280,000

Indirect-labor wages

$20,000

3. Material Information for March:

Raw Materials, Inventory, March 1

$8,000

Purchase or raw material

$159,000

Direct materials requisitioned:

Job 55

$55,000

Job 58

$72,000

Job 59

$18,000

4. Other costs incurred in March:

Factory Utilities

$1,800

Sales offices Utilities

$1,100

Administrative offices Utilities

$1,900

Factory equipment repair and maintenance costs

$1,700

Depreciation on factory equipment

$3,000

Manufacturing supplies purchased and used

$2,000

5. During March the following jobs were completed :

Job 55

Job 58

6. During March the following jobs were sold for the following amounts:

Job 55

$215,000

Job 57

$100,000

Required:

You need to use cell references to provide answers and calculations. There are 9 questions in Part 1.

1. Develop the predetermined overhead rate.

2. Complete the job cost sheets provided below for the month of March:

Job 55

Job 58

Job 59

Beginning Balance

Current costs:

Direct materials

Direct Labor

Hint: You need to calculate the hourly rate and then compute direct labor cost per job.

Applied overhead

Total

3. Determine the ending Work-In-Process Inventory at the end of March and provide the Job number of the job(s) still in Work-in-Process at the end of March and the determine total cost of ending work in process for March.

4. Determine the ending Finished Goods for March and provide the Job number(s) of the job(s) in Finished Goods at the end of March and determine the total cost of ending finished goods for March.

5. Determine the Cost of Goods Sold for March and provide the Job number of the Job(s) in Cost of Goods Sold for March and determine the total cost of goods sold for March.

6. Prepare a statement of cost of goods manufactured for March below. Use Manufacturing Overhead applied in your statement. You need to prepare in good form. Please see Exhibit 18.6.

Glass Company

Statement of Cost of Goods Manufactured

For Month ending March 31, 20XX

Current manufacturing costs:

Cost of material placed in production

Raw materials, 3/1/XX

Purchases

Total available

Raw materials, 3/31/XX

Direct Labor

Manufacturing overhead Applied

Work-in-process March 1, 20XX

Total costs in process

Work-in-process March 31, 20XX

Cost of goods manufactured

7. Prepare an Income Statement for March below. The company does not close the over or underapplied overhead until the end of the year, so no adjustment is needed to Cost of Goods Sold.

You need to prepare in good form. Please see Exhibit 18.6, but you do not have to provide a detailed COGS section, since you know COGS relates to the Job(s) sold at cost and should agree with your analysis in #5 above.

Glass Company

Income Statement

For Month ending March 31, 20XX

Sales

Cost of goods sold

Gross Profit

Selling and Administrative expenses

Net income

8. Determine the dollar amount and the underapplied or overapplied manufacturing for March. Provide your calculations.

9. Prepare a Pie chart below showing the three product costs that were added to the job cost sheets in March.