E2-5 Compute the manufacturing overhead rate and under- or overapplied overhead
Ikerd Company applies overhead to jobs on the basis of machine hours used. Overhead costs are expected to total
$300,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $322,000 of overhead costs
are incurred and 130,000 hours are used.
Instructions
(a) Compute the manufacturing overhead rate for the year.
(b) What is the amount of under-or overapplied overhead at December 31?
(c ) Prepare the adjusting entry to assign the under-or overapplied overhead for the year to cost of goods sold.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

1. Assume that the estimated total overhead for the year changed to $350,000. Determine

the impact on this change on the overhead rate, the amount of manufacturing overhead

over(under) applied. Revise the journal to dispose of over (under) applied overhead.

E1-16 Prepare a cost of goods manufactured schedule and present the ending inventories on the balance sheet
An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the month ended
June 30, 2017.
	Inventories		Beginning		Ending
	Raw materials		$9,000		$13,100
	Work in process		5,000		7,000
	Finished goods		9,000		8,000
Costs incurred: raw materials purchases $54,000, direct labor $47,000, manufacturing overhead $19,900. The specific
overhead costs were: indirect labor $5,500, factory insurance, $4,000, machinery depreciation $4,000, machinery
repairs $1,800, factory utilities $3,100, miscellaneous factory costs $1,500. Assume that all raw materials used were
direct materials.
Instructions
(a)	Prepare the cost of goods manufactured schedule for the month ended June 30, 2017.
(b)	Show the presentation of the ending inventories on the June 30, 2017 balance sheet.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

2. Assume that the inventory balances changed as follows: beginning raw materials $12,000,

ending work in process $6,750 and ending finished goods $10,000. Show the impact of these

changes on the cost of goods manufactured schedule and balance sheet.

E1-12 Prepare a cost of goods manufactured schedule and a partial income statement
Cepeda Corporation has the following cost records for June 2017.
	Indirect factory labor	$4,500		Factory utilities		$400
	Direct materials used	20,000		Depreciation, factory equipment		1,400
	Work in process, 6/1/17	3,000		Direct labor		40,000
	Work in process, 6/30/17	3,800		Maintenance, factory equipment		1,800
	Finished goods, 6/1/17	5,000		Indirect materials		2,200
	Finished goods, 6/30/17	7,500		Factory manager's salary		3,000
Instructions
(a)	Prepare a cost of goods manufactured schedule for June 2017.
(b)	Prepare an income statement through gross profit for June 2017 assuming sales revenue is
	$92,100
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

Assume the following balances changed: beginning work in process $4,200, direct labor

$39,000, and indirect materials $2,700. Show the impact of these changes on the cost

of goods manufactured schedule.

P1-5A Prepare a cost of goods manufactured schedule and a correct income statement
Empire Company is a manufacturer of smart phones. Its controller resigned in October 2017.
An inexperienced assistant accountant has prepared the following income statement for
the month of October 2017.
	EMPIRE COMPANY
	income Statement
	For the Month Ended October 31, 2017
	Sales Revenue						$780,000
	Less: Operating Expenses
	Raw materials purchases				$264,000
	Direct labor costs				190,000
	Advertising expense				90,000
	Selling and administrative salaries				75,000
	Rent on factory facilities				60,000
	Depreciation on sales equipment				45,000
	Depreciation on factory equipment				31,000
	Indirect labor cost				28,000
	Utilities expense				12,000
	Insurance expense				8,000		$803,000
	Net loss						($23,000)
Prior to October 2017, the company had been profitable every month. The company's president is concerned
about the accuracy of the income statement. As her friend, you have been asked to review the income statement
and make necessary corrections. After examining other manufacturing cost data, you have acquired additional
information as follows.
1.	Inventory balances at the beginning and end of October were:
			October 1	October 31
	Raw materials		$18,000	$29,000
	Work in process		20,000	14,000
	Finished goods		30,000	50,000
2.	Only 75% of the utilities expense and 60% of the insurance expense apply to factory
	operations. The remaining amounts should be charged to selling and administrative
	activities.
Instructions
(a)	Prepare a schedule of cost of goods manufactured for October 2017.
(b)	Prepare a correct income statement for October 2017.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

4. Assume that utilities expense and insurance expense changed to $15,000 and $9,000 respectively. Also assume

that 80% of utilities expense and 65% of insurance expense apply to factory operations. Show the impact of these

changes on the cost of goods manufactured schedule and the income statement.