Gitano Products operates a job order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased) Its predetermined overhead rate was based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production The company has provided the following data for the just completed year Purchase of raw materials $510,000 Direct labor cost $90,000 Manufacturing overhead costs Indirect labor $170,000 Property taxes $48,000 Depreciation of equipment $260,000 Maintenance $95,000 Insurance $7,000 Rent, building $180,000 Beginning Ending Raw materials $20,000 $80,000 Work in process $150,000 $70,000 Finished Goods $260,000 $400,000 Required Compute the predetermined overhead rate for the year Compute the amount of under applied or over applied overhead for the year Prepare a schedule of cost of goods manufactured for the year Assume all raw materials are used in production as direct materials Compute the unadjusted cost of goods sold for the year Do not include any under applied or over applied overhead in your answer Assume that the $70,000 ending balance in WIP includes $24,000 of direct materials Given this assumption, supply the information missing below Direct materials $24,000 Direct labor Manufacturing overhead Work in process inventory $70,000 Memo Within your business memo address the following questions Explain why the manufacturing overhead was under applied or over applied for the year What options are available for disposing of under applied or over applied overhead Discuss how the predetermined factory overhead rate can be used in job order cost accounting to assist management in pricing jobs Embed memo within Excel Document Use this table for part 5 Gitano Products Company Schedule of Cost of Goods Sold Overhead cost in Work in Process Direct Materials Cost 24,000 Total Overhead cost Applied in WIP Labor Cost in WIP Total Ending WIP Direct Materials Manufacturing Overhead Direct Labor You must use the Excel template provided on blackboard otherwise your project will not be graded

Question

Gitano Products operates a job order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased)  Its predetermined overhead rate was based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production  The company has provided the following data for the just completed year  Purchase of raw materials $510,000 Direct labor cost $90,000 Manufacturing overhead costs  Indirect labor $170,000 Property taxes $48,000 Depreciation of equipment $260,000 Maintenance $95,000 Insurance $7,000 Rent, building $180,000 Beginning Ending Raw materials $20,000 $80,000 Work in process $150,000 $70,000 Finished Goods $260,000 $400,000 Required   Compute the predetermined overhead rate for the year  Compute the amount of under applied or over applied overhead for the year  Prepare a schedule of cost of goods manufactured for the year  Assume all raw materials are used in production as direct materials  Compute the unadjusted cost of goods sold for the year  Do not include any under applied or over applied overhead in your answer  Assume that the $70,000 ending balance in WIP includes $24,000 of direct materials  Given this assumption, supply the information missing below  Direct materials $24,000 Direct labor   Manufacturing overhead   Work in process inventory $70,000 Memo  Within your business memo address the following questions  Explain why the manufacturing overhead was under applied or over applied for the year  What options are available for disposing of under applied or over applied overhead  Discuss how the predetermined factory overhead rate can be used in job order cost accounting to assist management in pricing jobs  Embed memo within Excel Document Use this table for part 5 Gitano Products Company Schedule of Cost of Goods Sold Overhead cost in Work in Process Direct Materials Cost 24,000 Total Overhead cost Applied in WIP  Labor Cost in WIP  Total Ending WIP  Direct Materials Manufacturing Overhead  Direct Labor  You must use the Excel template provided on blackboard otherwise your project will not be graded

Accepted Answer

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

Question

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

Payroll Accounting 2022

Students also viewed these Accounting questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Purchase of raw materials	$510,000
Direct labor cost	$90,000
Manufacturing overhead costs:
Indirect labor	$170,000
Property taxes	$48,000
Depreciation of equipment	$260,000
Maintenance	$95,000
Insurance	$7,000
Rent, building	$180,000

	Beginning	Ending
Raw materials	$20,000	$80,000
Work in process	$150,000	$70,000
Finished Goods	$260,000	$400,000

Direct materials	$24,000
Direct labor	?
Manufacturing overhead	?
Work in process inventory	$70,000

Gitano Products Company
Schedule of Cost of Goods Sold

Overhead cost in Work in Process
Direct Materials Cost	24,000
Total Overhead cost Applied in WIP:

Labor Cost in WIP:
Total Ending WIP:
Direct Materials
Manufacturing Overhead:
Direct Labor: