Provided Data
Data
Allocation base		Machine-hours
Estimated manufacturing overhead cost		$300,000
Estimated total amount of the allocation base		75,000	machine-hours
Actual manufacturing overhead cost		$290,000
Actual total amount of the allocation base		68,000	machine-hours
Enter a formula into each of the shaded cells below
Computation of the predetermined overhead rate
Estimated manufacturing overhead cost			$300,000
Estimated total amount of the allocation base			75,000	machine-hours
Predetermined overhead rate			$4.00	per machine-hour
Computation of underapplied or overapplied manufacturing overhead
Actual manufacturing overhead cost			$ 290,000
Manufacturing overhead cost applied to Work in Process during the year:
Predetermined overhead rate			$4.00	per machine-hour
Actual total amount of the allocation base			68,000	machine-hours
Manufacturing overhead applied			$ 272,000	Correct
Underapplied (overapplied) manufacturing overhead			$ 18,000	Correct
No action required, but try it.
Provided Data
Data
Allocation base		Machine-hours
Estimated manufacturing overhead cost		$100,000
Estimated total amount of the allocation base		50,000	machine-hours
Actual manufacturing overhead cost		$90,000
Actual total amount of the allocation base		40,000	machine-hours
Enter a formula into each of the shaded cells below
Computation of the predetermined overhead rate
Estimated manufacturing overhead cost			$100,000
Estimated total amount of the allocation base			50,000	machine-hours
Predetermined overhead rate			$2.00	per machine-hour
Computation of underapplied or overapplied manufacturing overhead
Actual manufacturing overhead cost			$ 90,000
Manufacturing overhead cost applied to Work in Process during the year:
Predetermined overhead rate			$2.00	per machine-hour
Actual total amount of the allocation base			40,000	machine-hours
Manufacturing overhead applied			$ 80,000	Correct
Underapplied (overapplied) manufacturing overhead			$ 10,000	Correct
No action required, but try it.
Provided Data
Estimated manufacturing overhead cost		$100,000
Estimated total amount of the allocation base		50,000	machine-hours
Actual manufacturing overhead cost		$100,000
Actual total amount of the allocation base		40,000	machine-hours
Enter a formula into each of the shaded cells below
Computation of the predetermined overhead rate
Estimated manufacturing overhead cost			$100,000
Estimated total amount of the allocation base			50,000	machine-hours
Predetermined overhead rate			$2.00	per machine-hour
Computation of underapplied or overapplied manufacturing overhead
Actual manufacturing overhead cost			$ 100,000
Manufacturing overhead cost applied to Work in Process during the year:
Predetermined overhead rate			$2.00	per machine-hour
Actual total amount of the allocation base			40,000	machine-hours
Manufacturing overhead applied			$ 80,000	Correct
Underapplied (overapplied) manufacturing overhead			$ 20,000	Correct
The Foundational 15, p. 114
Enter a formula into each of the shaded cells below
Provided Data
Estimated fixed manufacturing overhead				$ 10,000
Estimated variable manufacturing overhead per Direct Labor Hour				$ 1.00
Esitmated total Direct Labor Hours to be worked				2,000
Total actual manufacturing overhead costs incurred				$ 12,500
			Job P	Job Q
Direct materials			$ 13,000	$ 8,000
Direct labor costs			$ 21,000	$ 7,500
Actual Direct Labor Hours worked			1,400	500
The estimated total manufacturing overhead cost is computed as follows:
Y = Estimated fixed manufacturing overhead + (Estimated variable manufacturing overhead per DLH)(Esitmated total DLH to be worked)
Estimated fixed manufacturing overhead			$ 10,000
Estimated variable manufacturing overhead:			$ 2,000
Estimated total manufacturing overhead cost				Incorrect
The predetermined overhead rate is computed as follows:
Estimated total manufacturing overhead			$ 10,000
Estimated total direct labor hours (DLHs)			2,000	DLHs
Predetermined overhead rate				per DLH
		Job P	Job Q
Actual direct labor hours worked		1,400	500
Predetermined overhead rate per DLH		$ -	$ -
Manufacturing overhead applied
		Incorrect	Incorrect
		Job P	Job Q
Direct labor cost		$ 21,000	$ 7,500
Actual direct labor hours worked		1,400	500
Direct labor hourly wage rate
		Incorrect	Incorrect
Total manufacturing cost assigned to Job P:
Direct materials		$ 13,000
Direct labor		$ 21,000
Manufacturing overhead applied			Incorrect
Total manufacturing cost			Incorrect
Unit product cost for Job P:
Total manufacturing cost		$ -
Number of units in the job
Unit product cost			Incorrect
Total manufacturing cost assigned to Job Q:
Direct materials		$ 8,000
Direct labor		$ 7,500
Manufacturing overhead applied		$ -
Total manufacturing cost			Incorrect
No action required
No action required
No action required
The 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 inventory
Total manufacturing costs
Add: Beginning work in process inventory
Deduct: Ending work in process inventory			$ -
Cost of goods manufactured				Incorrect
No action required
No action required
The Schedule of Cost of Goods Sold
Finished goods inventory, beginning
Add: Cost of goods manufactured
Cost of goods available for sale
Deduct: Finished goods inventory, ending
Unadjusted cost of goods sold			Incorrect
No action required
The amount of underapplied overhead
Actual direct labor-hours
Predetermined overhead rate
Manufacturing overhead applied			Incorrect
Actual manufacturing overhead
Deduct: Manufacturing overhead applied
Underapplied overhead			Incorrect
No action required
The income statement is as follows:
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income			Incorrect
Exercise 3-1, p. 115
The estimated total manufacturing overhead cost is computed as follows:
Y = Fixed Mfg. Costs + ($x.xx per DLH)( DLHs)
Estimated fixed manufacturing overhead		$ 94,000
Estimated variable manufacturing overhead
Estimated total manufacturing overhead cost			Incorrect
The predetermined overhead rate is computed as follows:
Estimated total manufacturing overhead		$ -
Estimated total direct labor hours (DLHs)			DLHs
Predetermined overhead rate			per DLH	Incorrect
Exercise 3-6, p. 116
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
Less indirect materials included in manufacturing overhead
Direct labor
Manufacturing overhead applied to work in process inventory
Total manufacturing costs
Add: Beginning work in process inventory
Deduct: Ending work in process inventory
Cost of goods manufactured
Cost of Goods Sold
Finished goods inventory, beginning
Add: Cost of goods manufactured			$ -
Goods available for sale				Incorrect
Deduct: Finished goods inventory, ending
Unadjusted cost of goods sold				Incorrect
Add: Underapplied overhead
Adjusted cost of goods sold				Incorrect
Exercise 3-12, p. 118
Actual manufacturing overhead costs		$ 473,000
Manufacturing overhead cost applied
Overapplied overhead cost			Incorrect
Direct materials:
Raw materials inventory, beginning
Add purchases of raw materials
Raw materials available for use
Deduct raw materials inventory, ending
Raw materials used in production
Less indirect materials
Direct labor
Manufacturing overhead cost applied to work in process
Total manufacturing costs				Incorrect
Add: Work in process, beginning
Deduct: Work in process, ending
Cost of goods manufactured				Incorrect
Problem 3-25, p. 125
Estimated total manufacturing overhead costs
Estimated total amount of the overhead base
(Direct material costs)
Predetermined overhead rate				Incorrect
Before the underapplied or overapplied overhead can be computed, we must determine the amount of direct materials used in production for the year.
Raw materials inventory, beginning
Add, Purchases of raw materials
Raw materials available
Deduct: Raw materials inventory, ending
Raw materials used in production			Incorrect
Actual manufacturing overhead costs:
Indirect labor
Property taxes
Depreciation of equipment
Maintenance
Insurance
Rent, building
Total actual costs			Incorrect
Applied manufacturing overhead costs:			Incorrect
Underapplied overhead			Incorrect
Gitano Products
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				Incorrect
Add: Work in process, beginning
Deduct: Work in process, ending
Cost of goods manufactured				Incorrect
Unadjusted cost of goods sold:
Finished goods inventory, beginning
Add: Cost of goods manufactured
Goods available for sale			Incorrect
Deduct: Finished goods inventory, ending
Unadjusted cost of goods sold			Incorrect
The underapplied overhead can either be closed out to Cost of Goods Sold or allocated between Work in Process, Finished Goods, and Cost of Goods Sold based on the overhead applied during the year in the ending balance in each of these accounts.
Direct materials
Direct labor
Overhead applied			Incorrect
Total manufacturing cost			Incorrect
The amount of overhead cost in Work in Process was:
$24,000 direct materials cost 160% = $38,400
The amount of direct labor cost in Work in Process is:
Total ending work in process
Deduct: Direct materials
Manufacturing overhead				Incorrect
Direct labor cost				Incorrect
The completed schedule of costs in Work in Process was:
Direct materials
Direct labor
Manufacturing overhead
Work in process inventory			Incorrect