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
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 $110,400 of manufacturing overhead for an estimated allocation base of $92,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:
| | | |
| Purchase of raw materials | $ | 135,000 |
| Direct labor cost | $ | 88,000 |
| Manufacturing overhead costs: | | |
| Indirect labor | $ | 92,500 |
| Property taxes | $ | 8,300 |
| Depreciation of equipment | $ | 18,000 |
| Maintenance | $ | 15,000 |
| Insurance | $ | 11,300 |
| Rent, building | $ | 33,000 |
| |
| | Beginning | Ending |
| Raw Materials | $ | 26,000 | $ | 16,000 |
| Work in Process | $ | 45,000 | $ | 40,000 |
| Finished Goods | $ | 72,000 | $ | 58,000 |
| |
Required:
1. Compute the predetermined overhead rate for the year.
2. Compute the amount of underapplied or overapplied overhead for the year.
3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.
4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.
5. Assume that the $40,000 ending balance in Work in Process includes $8,600 of direct materials. Given this assumption, supply the information missing below:
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 $110,400 of manufacturing overhead for an estimated allocation base of $92,000 direct material dollars to be used in production. The company has provided the following data for the just completed year: $ 135,000 $ 88,000 Purchase of raw materials Direct labor cost Manufacturing overhead costs: Indirect labor Property taxes Depreciation of equipment Maintenance Insurance Rent, building $ $ $ 92,500 8,300 18,000 15,000 11,300 33,000 $ $ Raw Materials Work in Process Finished Goods Beginning $ 26,000 $ $ 45,000 $ $ 72,000 $ Ending 16,000 40,000 58,000 Required: 1. Compute the predetermined overhead rate for the year. 2. Compute the amount of underapplied or overapplied overhead for the year. 3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. 3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. 5. Assume that the $40,000 ending balance in Work in Process includes $8,600 of direct materials. Given this assumption, supply the information missing below: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the predetermined overhead rate for the year. Predetermined overhead rate 120 % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the amount of underapplied or overapplied overhead for the year. Underapplied overhead $ 57,267 Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Gitano Products Schedule of Cost of Goods Manufactured Ending raw materials inventory Direct materials: Total raw materials available Direct materials used in production Total manufacturing costs added to production Total manufacturing costs to account for 0 Cost of goods manufactured Required: 1. Compute the predetermined overhead rate for the year. 2. Compute the amount of underapplied or overapplied overhead for the year. 3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. 4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer. 5. Assume that the $40,000 ending balance in Work in Process includes $8,600 of direct materials. Given this assumption, supply the information missing below: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Assume that the $40,000 ending balance in Work in Process includes $8,600 of direct materials. Given this assumption, supply the information missing below: Direct materials $ 8,600 Direct labor Manufacturing overhead Work in process inventory $ 40,000
