Dream Makers is a small manufacturer of gold and platinum jewelry It uses a job costing system that applies overhead on the basis of direct labor hours Budgeted factory overhead for the year was $584,600, and management budgeted 39,500 direct labor hours The company had no Materials, Work in Process, or Finished Goods Inventory at the beginning of April These transactions were recorded during April April insurance cost for the manufacturing property and equipment was $2,400 The premium had been paid in January Recorded $1,445 depreciation on an administrative asset Purchased 21 pounds of high grade polishing materials at $16 per pound (indirect materials) Paid factory utility bill, $6,990, in cash Incurred 4,000 hours and paid payroll costs of $160,000 Of this amount, 1,000 hours and $20,000 were indirect labor costs Incurred and paid other factory overhead costs, $6,630 Purchased $30,500 of materials Direct materials included unpolished semiprecious stones and gold Indirect materials included supplies and polishing materials Requisitioned $24,500 of direct materials and $2,800 of indirect materials from Materials Inventory Incurred miscellaneous selling and administrative expenses, $7,340 Incurred $4,765 depreciation on manufacturing equipment for April Paid advertising expenses in cash, $3,550 Applied factory overhead to production on the basis of direct labor hours Completed goods costing $70,000 during the month Made sales on account in April, $71,930 The Cost of Goods Sold was $57,940 Required 1 Compute the firms predetermined factory overhead rate for the year 2 Prepare journal entries to record the April events 3 Calculate the amount of overapplied or underapplied overhead on April 30 4 Prepare a schedule of Cost of Goods Manufactured and a schedule of Cost of Goods Sold 5 Compute the amount of overapplied or underapplied overhead that should be prorated to Work in Process, Finished Goods, and Cost of Goods Sold 5 Prepare the income statement for April

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 01, 2024

Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct

Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $584,600, and management budgeted 39,500 direct labor-hours. The company had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April:

April insurance cost for the manufacturing property and equipment was $2,400. The premium had been paid in January.
Recorded $1,445 depreciation on an administrative asset.
Purchased 21 pounds of high-grade polishing materials at $16 per pound (indirect materials).
Paid factory utility bill, $6,990, in cash.
Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs.
Incurred and paid other factory overhead costs, $6,630.
Purchased $30,500 of materials. Direct materials included unpolished semiprecious stones and gold. Indirect materials included supplies and polishing materials.
Requisitioned $24,500 of direct materials and $2,800 of indirect materials from Materials Inventory.
Incurred miscellaneous selling and administrative expenses, $7,340.
Incurred $4,765 depreciation on manufacturing equipment for April.
Paid advertising expenses in cash, $3,550.
Applied factory overhead to production on the basis of direct labor hours.
Completed goods costing $70,000 during the month.
Made sales on account in April, $71,930. The Cost of Goods Sold was $57,940.