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 $52,600 and its total manufacturing overhead cost to be $84,160.

Several incomplete general ledger accounts showing the transactions that occurred during the most recent accounting period follow:

Required:

Calculate the predetermined overhead rate.

Predetermined Overhead Rate

% of Direct Labor Cost

2.

Fill in the missing values in the T-accounts.

Raw Materials Inventory

Work in Process Inventory

Beginning Balance

14,000

Beginning Balance

29,000

Purchases

93,600

Direct Materials

68,800

Ending Balance

29,000

Direct Labor

$41,400

Applied Overhead

Ending Balance

19,900

Finished Goods Inventory

Cost of Goods Sold

Beginning Balance

40,300

Unadjusted Cost of Goods Sold

Cost of Goods Completed

Adjusted Cost of Goods Sold

Ending Balance

49,200

Sales Revenue

Manufacturing Overhead

302,000

Indirect Materials

9,800

Applied Overhead

Indirect Labor

14,300

Factory Depreciation

12,600

Factory Rent

5,300

Factory Utilities

2,300

Other Factory Costs

9,600

Actual Overhead

53,900

Selling, General, and Administrative Expenses

Adm. Salaries

27,800

Office Depreciation

18,600

Advertising

13,500

Ending Balance

59,900

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.

DOBSON MANUFACTURING COMPANY
Cost of Goods Manufactured Report and Sold
Direct Materials Used in Production
Total Current Manufacturing Costs
Total Work in Process
Cost of Goods Manufactured
Cost of Goods Available for Sale
Unadjusted Cost of Goods Sold
Adjusted Cost of Goods Sold

5.	Prepare a brief income statement for the company.