Britano, Inc. implements a job-order costing system and applies overhead costs to jobs based on the value of direct materials used in production (not raw materials purchased). At the beginning of the year, the company estimated a total of $800,000 of manufacturing overhead costs with an estimated value of direct material used of $500,000. The company provides the following data at the end of the year: $510,000 $ 90,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $170,000 $ 48,000 $260,000 $ 95,000 $ 7,000 $180,000 In addition, following is the inventory data of Britano, Inc. for the year: Beginning Ending Raw Materials $20,000 $80,000 Work in Process $150,000 $70,000 Finished Goods $260,000 $400,000 Required: 1. Compute the predetermined overhead rate for the year. (2%) 2. Compute the amount of underapplied or overapplied overhead for the year. (8%) 3. Prepare a schedule of the cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. (8%) 4. 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) (4%) 5. Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $8,500 of direct materials and $2,700 of direct labor cost and the company priced its jobs at 25% above the job's cost according to the accounting system? (4%) 6. Direct materials made up $24,000 of the $70,000 ending Work in Process inventory balance. Supply the information missing below (4%): Direct materials $24,000 Direct labor ? Manufacturing overhead Work in process inventory $70,000 Britano, Inc. implements a job-order costing system and applies overhead costs to jobs based on the value of direct materials used in production (not raw materials purchased). At the beginning of the year, the company estimated a total of $800,000 of manufacturing overhead costs with an estimated value of direct material used of $500,000. The company provides the following data at the end of the year: $510,000 $ 90,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $170,000 $ 48,000 $260,000 $ 95,000 $ 7,000 $180,000 In addition, following is the inventory data of Britano, Inc. for the year: Beginning Ending Raw Materials $20,000 $80,000 Work in Process $150,000 $70,000 Finished Goods $260,000 $400,000 Required: 1. Compute the predetermined overhead rate for the year. (2%) 2. Compute the amount of underapplied or overapplied overhead for the year. (8%) 3. Prepare a schedule of the cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. (8%) 4. 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) (4%) 5. Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $8,500 of direct materials and $2,700 of direct labor cost and the company priced its jobs at 25% above the job's cost according to the accounting system? (4%) 6. Direct materials made up $24,000 of the $70,000 ending Work in Process inventory balance. Supply the information missing below (4%): Direct materials $24,000 Direct labor ? Manufacturing overhead Work in process inventory $70,000
