Question
Please answer all parts. Please! No need to show working. At Allen Company manufacturing overhead is estimated at 150% of direct labor hours. Overhead was
Please answer all parts. Please! No need to show working.
At Allen Company manufacturing overhead is estimated at 150% of direct labor hours. Overhead was estimated to be $575,000 and direct labor hours were estimated to be 360,000.
Actual direct labor hours and actual direct labor costs for the year amounted to 400,000 hours and $700,000.
In addition, Allen Company incurred the following actual costs during the year:
- Administrative expenses, $100,000
- Depreciation expense on fixed assets, $500,000 (80% of the depreciation expense was related to manufacturing activities)
- Indirect material costs, $25,000
- Indirect labor costs, $45,000
- Utility expense on the manufacturing facility, $125,000
- Insurance expense on the manufacturing facility, $35,000
- Marketing expenses, $75,000
- Sales & promotion expenses, $25,000
Allen Company had the following inventory balances at the beginning and end of the year:
January 1 | December 31 | ||
Finished goods | $450,000 | $675,000 | |
Work in process | 600,000 | 650,000 | |
Raw (direct) materials | 350,000 | 400,000 | |
During the year, the company purchased $150,000 of raw materials and generated sales of $2,500,000.
- What amount of raw materials were used during the period?
- What is the amount of prime costs?
- What is the predetermined manufacturing overhead rate?
- What amount is applied to manufacturing overhead?
- What is the amount of Manufacturing Costs added for the period?
- What is the Cost of Goods Manufactured?
- At the end of year, was manufacturing overhead over- or under-applied?
- Refer to the previous question. By what amount was manufacturing overhead over- or under-applied?
- What is Cost of Goods Sold, after adjusting for any under-or over-applied overhead?
- What is Gross Profit?
- What are total Selling, General & Administrative Expenses?
- What is Net Income or Loss?
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