Compute a predetermined overhead rate.

Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.

Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts.

Data for the year that just ended:

Estimated total manufacturing overhead cost- 275,000

Estimated total direct labor hours: 25,000

Actual total direct labor hours: 27,760

Actual costs for the year:

purchase of raw materials- 375,000

Direct labor cost 536,300

Manufacturing overhead costs- 302,750

Inventory:

Raw materials all direct: beginning- 15,000 Ending- 11,375

Work in process: beginning- 27,875 ending- 22,350

Finished goods: beginning- 34,600 ending- 26,450

Use this data to answer the following:

Actual manufacturing overhead cost

predetermined overhead rate

actual direct labor hours

manufacturing overhead applied

underapplied (overapplied) manufacturing overhead

2. Prepare a schedule of cost goods manufactured

Direct materials:

Raw materaials inventory, beginning

Add: purchase of raw materials

Total raw materials available

Deduct: Raw materials used in production

Direct Labor:

Manufacturing overhead applied to work in process

Total manufacturing costs

Add: beginning work in process inventory

Total cost of work in process

Deduct ending work in process inventory

Cost of goods manufactured

3. Prepare a schedule of cost of goods sold

Finished goods inventory beginning

Add: cost of goods manufactured

Costs of goods available for sale

Deduct: finished goods inventory, ending

Unadjusted cost of goods sold

underapplied (overapplied) overhead

Adjusted cost of goods sold