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Managerial Accounting Please answer within 45 min for study group I will be online if any questions arise Houston Company is highly automated and uses
Managerial Accounting Please answer within 45 min for study group I will be online if any questions arise
Houston Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: Computer-hours 83,000 Fixed manufacturing overhead cost $ 1,270,000 Variable manufacturing overhead per computer-hour $ 3.60 During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Computer-hours Manufacturing overhead cost 50,000 $ 1,011,000 Inventories at year-end: Raw materials $ 450,000 Work in process $ 110,000 Finished goods $ 1,030,000 Cost of goods sold $ 2,750,000 Required: 1. Compute the company's predetermined overhead rate for the year. (Round predetermined overhead rate to 2 decimal places.) Overhead rate per computer hour 2. Compute the underapplied or overapplied overhead for the year. (Round predetermined overhead rate to 2 decimal places.) 3. Determine the cost of goods sold for the year after any adjustment for underapplied or overapplied overhead. (Round predetermined overhead rate to 2 decimal places.)Step by Step Solution
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