Gateway

Please use the following information to answer questions a-e:

Gateway had only one job in process during August (Job 2922) and had no finished goods inventory on August 1^st. Job 2922 was started in July and finished during August. Data pertaining to the job is as follows:

Job 2922

Beginning WIP balance on August 1^st 28,975

Materials ($172,000 was Direct) 190,000

Labor ($207,000 was Direct) 213,000

Additional Overhead Costs 116,000

Units Completed 200

Units in Process at the end of August 0

Units Sold during August 125

*Estimated total manufacturing overhead for August was $145,950. The predetermined overhead rate was made on the basis of direct labor hours. The estimated direct labor hours in August were 210 hours. The actual direct labor hours totaled 215 hours.

a) What is Gateways predetermined overhead rate for August?

b) What is the amount of manufacturing overhead that would be applied to units of product during the period?

c) Was overhead underapplied or overapplied for the month of August? And by how much?

d) What was the Adjusted Cost of Goods Sold for August?

(Note: You may use the direct or indirect method to solve.)

e) What is the total value of Finished Goods Inventory at the end of August?