Question
Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. To calculate a predetermined overhead rate at
Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. To calculate a predetermined overhead rate at the beginning of the year, the company's estimates were: manufacturing overhead cost - $91,300 and estimated machine hours - 8300 The company has provided the following additional data: Beginning Ending Raw Materials $17,900 $12,700 Work in Process $47,000 $68,000 Finished Goods $67,800 $60,200 During the year, the company used 9,080 (actual) machine hours for production and incurred the following actual costs: Amount Purchase of raw materials (all direct) $92,600 Direct labour cost $79,700 Manufacturing overhead costs: Indirect labour $7,500 Property taxes $12,400 Depreciation of equipment $41,250 Maintenance $8,650 Insurance $10,900 Rent, building $35,800 Required:
a) Compute the predetermined overhead rate for the year. b) Calculate the amount of cost of raw materials used in production c) Compute the amount of applied overhead for the year. d) Calculate the amount of cost of goods manufactured for the year. e) Compute the cost of goods sold for the year. f) Create a ledger for manufacturing overhead based on the information given above. g) Compute the amount of under-applied or over-applied overhead for the year. h) Give journal entries to adjust the under-applied or over-applied overhead cost to COGS. i) Job 215 was started and completed during the year. What price should be charged to the customer if the job requires $3,200 direct material cost, $4,500 direct labor cost & 350 machine hours to complete, and the company charges a 45% profit on the cost? j) Direct materials made up $22,600 of the $68,000 ending Work in Process inventory balance. If the machine hours used to process the work in process inventory is 3200, calculate the information missing below: Amount Direct materials 24,900 Direct labor? Manufacturing overhead?
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