Manufacturing overhead cost Direct labor dollars $$126,00084,000 Inventory: Raw materials Work in process Finished goods \begin{tabular}{cccr} \multicolumn{2}{c}{ Beginning } & \multicolumn{2}{c}{ Ending } \\ \hline$ & 21,000 & $ & 16,000 \\ $ & 44,000 & $ & 40,000 \\ $ & 68,000 & $ & 60,000 \end{tabular} Actual costs incurred: Purchaseofrawmaterials(alldirect)Directlaborcost$$133,00080,000 Manufacturing overhead costs: Insurance, Factory Depreciation of equipment $$7,00018,000 Indirect labor Property taxes Maintenance Rent, building Job 137 . DirectmaterialsDirectlaborcost$$3,20024,200 % above job cost according to the accounting system 40% Direct materials ? Direct labor hours 8,000 Manufacturing overhead Work in process inventory \begin{tabular}{l} ? \\ \hline$40,000 \\ \hline \hline \end{tabular} PACIFIC MANUFACTURING COMPANY Computations 1 a. Estimated total manufacturing overhead cost Estimated total amount of the allocation base Predetermined overhead rate $126,000 $84,000 $150% Correct! 1b. Actual manufacturing overhead costs: Insurance, factory Depreciation of equipment Indirect labor Property taxes Maintenance Rent, building Total actual costs Applied manufacturing overhead costs Underapplied overhead $7,00018,00042,0009,00011,00036,000123,000$123,000 Try again! 2. PACIFIC MANUFACTURING COMPANY Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning Add purchases of raw materials Total raw materials available Deduct raw materials inventory, ending Raw materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs Add: Work in process, beginning Deduct: Work in process, ending Cost of goods manufactured PACIFIC MANUFACTURING COMPANY Computations 1 a. Estimated total manufacturing overhead cost Estimated total amount of the allocation base Predetermined overhead rate $126,000 $84,000 $150% Correct! 1b. Actual manufacturing overhead costs: Insurance, factory Depreciation of equipment Indirect labor Property taxes Maintenance Rent, building Total actual costs Applied manufacturing overhead costs Underapplied overhead $7,00018,00042,0009,00011,00036,000123,000$123,000 Try again! 2. PACIFIC MANUFACTURING COMPANY Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning Add purchases of raw materials Total raw materials available Deduct raw materials inventory, ending Raw materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs Add: Work in process, beginning Deduct: Work in process, ending Cost of goods manufactured 5
