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basis of raw materials purchased). Its predetermined overhead rate is based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated

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basis of raw materials purchased). Its predetermined overhead rate is 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 provided the following data for the just-completed year: Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $510,000 $90,000 $170,000 $48,000 $260,000 $95,000 $7,000 $180,000 Raw Materials Work in Process Finished Goods Required: 1. Compute the predetermined overhead rate. A Aa 99 Beginning Ending $20,000 $80,000 $150,000 $70,000 $260,000 $400,000 2. Compute the amount of underapplied or overapplied overhead. 3. Prepare a schedule of cost of goods manufactured. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold. Do not include any underapplied or overapplied overhead in your answer. What options are available for disposing of underapplied or overapplied overhead?

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