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Problem 2-25A Schedule of Cost of Goods Manufactured; Overhead Analysis [LO2-1, LO2-2, LO2-3, LO2-6, LO2-7] Gitano Products operates a job-order costing system and applies overhead

Problem 2-25A Schedule of Cost of Goods Manufactured; Overhead Analysis [LO2-1, LO2-2, LO2-3, LO2-6, LO2-7]

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $108,000 of manufacturing overhead for an estimated allocation base of $90,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

Purchase of raw materials

$

131,000

Direct labor cost

$

86,000

Manufacturing overhead costs:

Indirect labor

$

95,800

Property taxes

$

8,900

Depreciation of equipment

$

19,000

Maintenance

$

12,000

Insurance

$

8,600

Rent, building

$

34,000

Beginning

Ending

Raw Materials

$

26,000

$

12,000

Work in Process

$

46,000

$

37,000

Finished Goods

$

73,000

$

56,000

Required:

1-a.

Compute the predetermined overhead rate for the year.

1-b.

Compute the amount of underapplied or overapplied overhead for the year.

2.

Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

3.

Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)

4.

Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $3,800 in direct materials and $4,000 in direct labor cost and the company priced its jobs at 25% above the jobs cost according to the accounting system? (Round your answer to the nearest dollar.)

5.

Direct materials made up $8,600 of the $37,000 ending Work in Process inventory balance. Supply the information missing below:

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