Gitano Products operates a job$-$order cost system and applies overhead cost to jobs on the basis of direct materials used in production $($not on the basis of raw materials purchased$).$ In computing a predetermined overhead rate at the beginning of the year, the company$$s estimates were: manufacturing overhead cost, $800,000$; and direct materials to be used in production, $500,000.$ The company's inventory accounts at the beginning and end of the year were:Item$7$

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Item $7$

Gitano Products operates a job$-$order cost system and applies overhead cost to jobs on the basis of direct materials used in production $($not on the basis of raw materials purchased$).$ In computing a predetermined overhead rate at the beginning of the year, the company$$s estimates were: manufacturing overhead cost, $800,000$; and direct materials to be used in production, $500,000.$ The company's inventory accounts at the beginning and end of the year were:

Beginning Ending

Raw materials $20,00080,000$

Work in progress $150,00070,000$

Finished goods $260,000400,000$

The following actual costs were incurred during the year:

Purchase of raw materials $($all direct$)510,000$

Direct labour cost $90,000$

Manufacturing overhead costs:

Indirect labour $170,000$

Property taxes $48,000$

Depreciation of equipment $260,000$

Maintenance $95,000$

Insurance $7,000$

Rent, building $180,000$

Required:

$1.($a$)$ Compute the predetermined overhead rate for the year. $($Round your answer to $2$ decimal places.$)$

$($b$)$ Compute the amount of under$-$ or overapplied overhead for the year. $($Round your answer to the nearest whole number.$)$

$2.$ Prepare a schedule of cost of goods manufactured for the year. $($Round your answer$($s$)$ to the nearest whole number. Enter your answer as a positive value.$)$

$3.$ Compute the cost of goods sold for the year. $($Do not include any under$-$ or overapplied overhead in your cost of goods sold figure.$)($Round your answer to the nearest whole number.$)$

What options are available for disposing of under$-$ or overapplied overhead? $($You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.$)$

The under$-$ or overapplied overhead cost may be

check all that apply

closed out to Cost of Goods Sold. The underapplied overhead is deducted from cost of goods soldunanswered

allocated between Work in Progress, Total raw materials available, and Total manufacturing costs in proportion to the overhead applied in the ending balances of these accountsunanswered

closed out to Cost of Goods Sold. The underapplied overhead is added to cost of goods soldunanswered

allocated between Work in Progress, Finished Goods, and Cost of Goods Sold in proportion to the overhead applied during the current period in the ending balances of these accountsunanswered

closed out to Cost of Goods Sold. The overapplied overhead is deducted from cost of goods soldunanswered

closed out to the Total manufacturing costs. The overapplied overhead is added to cost of goods soldunanswered

closed out to Cost of Goods Sold. The overapplied overhead is added to cost of goods soldunanswered

closed out to the Total manufacturing costs. The underapplied overhead is deducted from cost of goods soldunanswered

$4.$ Job $215$ was started and completed during the year. What price would have been charged to the customer if the job required $8,500$ in direct materials and $2,700$ in direct labour cost and the company priced its jobs at $25\%$ above cost to manufacture? $($Round your answer to the nearest whole number.$)$

$5.$ Direct materials made up $24,000$ of the $70,000$ ending Work in Progress inventory balance. Supply the information missing below: $($Round your answer$($s$)$ to the nearest whole number.$)$