Cost of Goods Manufactured and Income Statement with Predetermined Overhead and Labor Cost Classification

Assume information pertaining to Bauer Hockey for April of the current year follows.

Sales $$670,950$

Purchases

Raw materials $202,500$

Manufacturing supplies $10,800$

Office supplies $1,980$

Salaries $($including fringe benefits$)$

Administrative $92,340$

Production supervisors $22,050$

Sales $94,500$

Depreciation

Plant and machinery $21,600$

Office and office equipment $7,200$

Utilities

Plant $13,500$

Office $5,400$

Inventories April $1$ April $30$

Raw materials $$45,315$ $$47,250$

Manufacturing supplies $5,5806,660$

Office supplies $1,6201,350$

Work$-$in$-$process $34,65036,180$

Finished goods $81,00079,200$

Additional information follows:

$$Manufacturing overhead is applied to products at $125\%$ of direct labor dollars.

$$Employee base wages are $$15$ per hour.

$$Employee fringe benefits amount to $20\%$ of the base wage rate. They are classified as manufacturing overhead.

$$During April, production employees worked $5,850$ hours, including $4,680$ regular hours and $360$ overtime hours spent working on products.

There were $810$ indirect labor hours.

$$Employees are paid a $50\%$ overtime premium. Any overtime premium is treated as manufacturing overhead.

Required

a$.$ Prepare a statement of cost of goods manufactured and an income statement for April.

Note: Do not use any negative signs with your statements.

Bauer Hockey, LLC

Statement of Cost of Goods Manufactured

For the Month of April

Current manufacturing costs:

Cost of materials placed in production:

Purchases

Total available

Direct labor

Beginning work$-$in$-$process

Total costs in process

Bauer hockey, LLC

Income Statement

For the Month of April

Sales

Cost of goods sold:

Cost of goods manufactured

Total goods available for sale

Gross profit

Other expenses:

Administrative salaries

Sales salaries

Depreciation on office and office equipment

Office utilities

b$.$ Determine underapplied or overapplied overhead for April.

$Answer Answer

c$.$ Recompute direct labor and actual manufacturing overhead assuming employee fringe benefits for direct labor hours are classified as direct labor.

Direct labor $Answer

Actual manufacturing overhead $Answer