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Data: Costs: Only Requirement 4, part B needs an answer. InStep prints custom training material for corporations. The business was started January 1, 2017. The
Data:
Costs:
Only Requirement 4, part B needs an answer.
InStep prints custom training material for corporations. The business was started January 1, 2017. The company uses a normal-costing system. It has two direct-cost pools, materials and labor, and one indirect-cost pool, overhead. Overhead is charged to printing jobs on the basis of direct labor cost. The following information is available for 2017 Click the icon to view the following data.) Data Table $ $ Budgeted direct labor costs Budgeted overhead costs Costs of actual material used Actual direct labor costs Actual overhead costs $ 220,000 286,000 163,000 207,000 270,100 $ GA There were two jobs in process on December 31, 2017: Job 11 and Job 12. Costs added to each job as of December 31 are as follows: B Click the icon to view the costs.) InStep has no finished-goods inventories because all printing jobs are transferred to cost of goods sold when completed Data Table Direct materials Direct labor Job 11 $ $ 5,800 4,900 5,180 Job 12 $ $ 7,400 Requirement 1. Compute the overhead allocation rate. Select the formula and enter the amounts to calculate the overhead allocation rate. (Enter the rate in decimal format to one decimal place, X.X. Do not enter the rate as a percentage.) Budgeted overhead costs Budgeted direct labor costs Overhead allocation rate 286,000 / 220,000 1.3 Requirement 2. Calculate the balance in ending work in process and cost of goods sold before any adjustments for under- or overallocated overhead. Begin by calculating ending work in process before any adjustments for under-or overallocated overhead. Job 11 Job 12 Total Cost Direct materials 4,900 $ 5,180 $ 10,080 Direct labor 5,800 7,400 13,200 Overhead 7,540 9,620 17,160 $ 18,240 $ 22,200 40,440 Ending work in process Before calculating the cost of goods sold, let's determine the total manufacturing costs incurred during the period. Direct materials $ 163,000 Direct labor 207,000 Overhead allocated 269,100 639.100 Total manufacturing costs Now select the formula and enter the amounts to calculate cost of goods sold before any adjustments for under- or overallocated overhead. (WIP = work in process. Enter a "0" for any zero balances.) Beginning WIP Total manufacturing costs Ending WIP Cost of goods sold $ 0 $ 639.100 $ 40,440 598,660 + Requirement 3. Calculate under-or overallocated overhead. Select the formula and enter the amounts to calculate under-or overallocated overhead. (Use a minus sign or parentheses for overallocated overhead.) Actual overhead costs Allocated overhead costs Under- (Over-) allocated overhead 1,000 270,100 $ 269,100 Requirement 4. Calculate the ending balances in work in process and cost of goods sold if the under-or overallocated overhead amount is as follows: (a) Written off to cost of goods sold (b) Prorated using the overhead allocated in 2017 (before proration) in the ending balances of cost of goods sold and work-in-process control accounts. (a) Complete the table below to show the ending balances in work in process and cost of goods sold if the under-or overallocated overhead amount is written off to cost of goods sold. (Enter a "0" for any zero balances.) Account Account Balance Write-off of Over-or (Before Write-off) Underallocated Overhead 40,440 $ 0 $ Account Balance (After Write-off) 40,440 599,660 Work in process 598,660 1,000 Cost of goods sold Total 639,100 $ 1,000 $ 640,100 (b) Complete the table below to show the ending balances in work in process and cost of goods sold if the under-or overallocated overhead amount is prorated using the overhead allocated in 2017 (before proration) in the ending balances of cost of goods sold and work-in-process control accounts. (Enter the percentages to the nearest tenth of a percent, X.X%, and round your final answers to the nearest whole dollar.) Proration of Account Account Balance Allocated Overhead Included in Each Account Balance Over-or Allocated Overhead Included in Each Account Balance (Before Proration) 17160 (Before Proration) 40440 Underallocated Overhead Balance (After Proration) Account As a % of Total Work in process Cost of goods sold 598660 % 639100 TotalStep by Step Solution
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