Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $65,000 and its total manufacturing overhead cost to be $91,000. Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 1. Calculate the predetermined overhead rate. 2. Fill in the missing values in the T-accounts. 3. Compute over- or underapplied overhead. 4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead. 5. Prepare a brief income statement for the company. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Calculate the predetermined overhead rate. Predetermined Overhead Rate 140 % of Direct labor cost Work in Process Inventory Raw Materials Inventory 15,000 140,000 30,000 Beginning Balance Purchases Beginning Balance Direct Materials 95,000 70,000 Ending Balance 30,000 Direct Labor $ 50,000 Applied Overhead Ending Balance 20,000 Finished Goods Inventory Beginning Balance 40,000 Cost of Goods Completed Ending Balance 50,000 Cost of Goods Sold Unadjusted Cost of Goods Sold Adjusted Cost of Goods Sold Sales Revenue Manufacturing Overhead 10,000 300,000 Indirect Materials Applied Overhead Indirect Labor 15,000 13,000 Factory Depreciation Factory Rent Factory Utilities Other Factory Costs Actual Overhead 7,000 3,000 10,000 58,000 Selling, General, and Administrative Expenses Adm. Salaries 28,000 Office Depreciation 20,000 Advertising 15,000 Ending Balance 63,000 Required 1 Required 2 Required 3 Required 4 Required 5 Compute over- or underapplied overhead. Manufacturing Overhead Overapplied by DOBSON MANUFACTURING COMPANY Cost of Goods Manufactured and Sold Report Beginning Raw Materials Inventory Plus: Raw Material Purchases 91,000 Less: Indirect Material Used Less: Ending Raw Materials Inventory Direct Materials Used in Production Direct Labor Manufacturing Overhead $ 0 Total Current Manufacturing Costs Plus: Beginning Work in Process Inventory Total Work in Process $ 0 Less: Ending Work in Process Inventory Cost of Goods Manufactured Plus: Beginning Finished Goods Inventory Cost of Goods Available for Sale $ 0 Less: Ending Finished Goods Inventory Unadjusted Cost of Goods Sold Adjustment for Overapplied Overhead Adjusted Cost of Goods Sold DOBSON MANUFACTURING COMPANY Income Statement Sales Revenue Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Net Income from Operations
