Assignment $2$

Kong Company reported the following actual costs data for the year:

Purchase of raw materials $($all direct$)$

$$200,000$

Direct labour $($average hourly rate of $$25)$

$400,000$

Manufacturing overhead costs

$100,000$

Change in inventories:

Increase in raw materials

$$25,000$

Increase in work in process

$16,000$

Increase in finished goods

$30,000$

Kong Company used a predetermined overhead rate based on direct labour hours. Estimated annual manufacturing overhead cost and direct labour hours were $$150,000$ and $20,000,$ respectively.

Required:

$1.$ What was the pre$-$determined manufacturing overhead rate?

$2.$ Calculate the cost of goods manufactured?

$3.$ What was the cost of goods sold before adjusting for any under or overapplied overhead?

$4.$ By how much was manufacturing overhead cost under or overapplied?

$5.$ Prepare a summary journal entry to close any under or overapplied manufacturing overhead cost to cost of goods sold.