PA2-8 (Algo) Recording Manufacturing Costs, Preparing a Cost of Goods Manufactured Report, and Calculating Income from Operations [LO 2-3, 2-4, 2-5, 2-6]

Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $53,300 and its total manufacturing overhead cost to be $85,280. Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement. Required: 1. Calculate the predetermined overhead rate.

2. Fill in the missing values in the T-accounts.

3. Compute over- or underapplied overhead.

4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead.

5. Prepare a brief income statement for the company.

Predetermined Overhead Rate % of Direct Labor Cost Raw Materials Inventory 13,500 Work in Process Inventory 29,600 Beginning Balance Beginning Balance Direct Materials Purchases 93,300 68,600 Ending Balance 29,300 Direct Labor $ 41,800 Applied Overhead Ending Balance 18.800 Cost of Goods Sold Finished Goods Inventory 40.900 Beginning Balance Cost of Goods Completed Ending Balance Unadjusted Cost of Goods Sold Adjusted Cost of Goods Sold 49,200 Sales Revenue 302.000 Applied Overhead Indirect Materials Indirect Labor Manufacturing Overhead 8,900 14,700 11,500 5,900 2,600 Factory Depreciation Factory Rent Factory Utilities Other Factory Costs Actual Overhead 9.200 52,800 Selling, General, and Administrative Expenses Adm. Salaries 27,400 Office Depreciation 19,300 Advertising 13,900 Ending Balance 60,600 Manufacturing Overhead DOBSON MANUFACTURING COMPANY Cost of Goods Manufactured and Sold Report Direct Materials used in Production Total Current Manufacturing Costs $ 0 Total Work in Process $ Cost of Goods Manufactured Cost of Goods Available for Sale $ 0 Unadjusted Cost of Goods Sold Adjusted Cost of Goods Sold DOBSON MANUFACTURING COMPANY Income Statement Net Income from Operations