Question
I am having trouble with calculating the Manufacturing overhead cost was applied to jobs. I know I need to figure out the Predetermined overhead rate
I am having trouble with calculating the Manufacturing overhead cost was applied to jobs. I know I need to figure out the Predetermined overhead rate first then the manufacturing overhead applied = actual DLH x per DLH but I'm still coming up wrong. I'm having trouble with the letter i only.
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $336,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account):
a.Raw materials purchased for use in production, $225,000.
b. Raw materials requisitioned for use in production (all direct materials), $210,000.
c. Utility bills were incurred, $58,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
d.Salary and wage costs were incurred:
Direct labor (1,125 hours)$255,000Indirect labor$95,000Selling and administrative salaries$135,000
e.Maintenance costs were incurred in the factory, $59,000.
f.Advertising costs were incurred, $141,000.
g.Depreciation was recorded for the year, $89,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment).
h.Rental cost incurred on buildings, $114,000 (75% related to factory operations, and the remainder related to selling and administrative facilities).
i.Manufacturing overhead cost was applied to jobs, $ ?.
j.Cost of goods manufactured for the year, $820,000.
k.Sales for the year (all on account) totaled $1,450,000. These goods cost $850,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
Raw materials$35,000Work in process$26,000Finished Goods$65,000
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