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

$130,200 of manufacturing overhead for an estimated allocation base of $93,000 direct material dollars to be used in production. The

company has provided the following data for the just completed year:

Purchase of raw materials-

$ 132,000

Direct labor cost-

$ 89,000

Manufacturing overhead costs:

Indirect labor-

$ 128,100

Property taxes-

8,700

Depreciation of equipment-

17,000

Maintenance-

$13,000

Insurance-

$9, 800

Rent, building-

31,000

Beginning-

Ending

Raw Materials-

$ 29,000 $ 15, 000

Work in Process-

$ 44,000 $ 38, 000

Finished Goods-

$ 72,000 $ 57, 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 $38,000 ending balance in Work in Process includes $8,900 of direct materials. Given this assumption, supply the

information missing below: (Attached Photos)

Compute the predetermined overhead rate for the year. Predetermined overhead rate % Required Required 2 > Compute the amount of underapplied or overapplied overhead for the year. overhead Assume that the $38,000 ending balance in Work in Process includes $8,900 of direct materials. Given this assumption, supply the information missing below: $ 8,800 Direct materials Direct labor Manufacturing overhead Work in process inventory $ 38,000