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3-14 (Static) Schedule of Cost of Goods Manufactured; Overhead Analysis [LO3-3, LO3-4] Gitano Products operates a job-order costing system and applies overhead cost to jobs
3-14 (Static) Schedule of Cost of Goods Manufactured; Overhead Analysis [LO3-3, LO3-4] 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 Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes $510,000 $ 90,000 $170,000 $ 48,000 Depreciation of equipment $ 260,000 Maintenance Insurance Rent, building Raw Materials $ 95,000 $ 7,000 $ 180,000 Beginning Ending $ 20,000 $ 80,000 $ Work in Process $ 70,000 150,000 $ $ Finished Goods 260,000 400,000 Required: 1. Compute the predetermined overhead rate for the year. 2. Compute the amount of underapplied or overapplied overhead for the year. 3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. 5. Assume that the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the information missing below: Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Compute the amount of underapplied or overapplied overhead for the year. Underapplied overhead $ 40,000 Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Gitano Products Schedule of Cost of Goods Manufactured Add: Purchases of raw materials Total raw materials available Direct materials: Beginning raw materials inventory $ 20,000 510,000 530,000 80,000 $450,000 90,000 Less: Ending raw materials inventory Direct materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs added to production Total manufacturing costs to account for Less: Ending work in process inventory Cost of goods manufactured 720,000 1,260,000 1,260,000 70,000 $ 1,190,000 Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1 2 3 4 5 Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. Unadjusted cost of goods sold $ 1,050,000 Assume that the $70,000 ending balance in Work in Process includes $24,000 of direct materials. Given this assumption, supply the information missing below: Direct materials Direct labor Manufacturing overhead Work in process inventory $ 24,000 7,600 38,400 $ 70,000
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