Question
I need help with this question please. Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at
I need help with this question please.
Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: |
Beginning Balance | Ending Balance | |||||
Raw materials | $ | 11,900 | $ | 15,100 | ||
Work in process | $ | 32,600 | $ | 14,700 | ||
Finished goods | $ | 105,000 | $ | 122,000 | ||
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,700 machine-hours and incur $265,500 in manufacturing overhead cost. The following transactions were recorded for the year: |
Raw materials were purchased, $412,000. | |
Raw materials were requisitioned for use in production, $408,800 ($381,000 direct and $27,800 indirect). | |
The following employee costs were incurred: direct labor, $336,000; indirect labor, $70,000; and administrative salaries, $155,000. | |
Selling costs, $111,000. | |
Factory utility costs, $28,000. | |
Depreciation for the year was $124,000 of which $114,000 is related to factory operations and $10,000 is related to selling, general, and administrative activities. | |
Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,400 machine-hours. | |
Sales for the year totaled $1,287,000. |
Required: | |
a. | Prepare a schedule of cost of goods manufactured in good form. (Do not round predetermined overhead rate. Input all amounts as positive values.) |
b. | Was the overhead underapplied or overapplied? By how much? (Do not round predetermined overhead rate. Input the amount as a positive value.) |
c. | Prepare an income statement for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold. (Input all amounts as positive values.) |
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