Answer questions 1-4

1.

a. Compute the predetermined overhead rate for the year.

b. Compute the amount of underapplied or overapplied overhead for the year.

2. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

3. Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.) What options are available for disposing of underapplied or overapplied overhead?

4. Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the jobs cost according to the accounting system?

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 actual data for the just completed year: Purchase of raw materials $510,000 $90,000 Direct labor Oost Manufacturing overhead costs: Indirect labor $170,000 $48.000 Property taxes.......................... Depreciation of equipment $260,000 Maintenance $95,000 $7,000 Insurance Rent, building $180,000 Beginning E $20,000 $80,000 Raw Materials Work in Prooess........................... $150,000 $70,000 Finished Goods $200,000 $400,000