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QUESTION 3: Gold Inc. is a manufacturer. The company's normal capacity is 30,000 units. According to the standards, each unit produced requires 3 meters of
QUESTION 3: Gold Inc. is a manufacturer. The company's normal capacity is 30,000 units. According to the standards, each unit produced requires 3 meters of raw materials and 2 hours to complete. Budgeted overhead for 2019 was $21,000. At the end of December 2019, the production of 27.000 units required 65,000 direct labor hours and the accounting records showed the following: Inventories: Beginning Ending Direct materials $12,000 $9,000 Work in process (WIP) $250 $1,250 Finished goods $0 $6,300 Other information: Direct materials purchases $31,000 Manufacturing plant services $2,000 Sales salaries expense $3,400 Customer delivery expense $1,500 Sales revenue $105,000 Utilities for manufacturing plant $4,500 Rent on manufacturing plant $9,000 Direct labor $10,000 Sales returns $2,000 Customer delivery $1,000 Storage costs of WIP $8,000 Required: a) Compute the total manufacturing costs, cost of goods manufactured, cost of goods sold and gross margin for the year 2019. b) Calculate the prime cost per unit and the conversion cost per unit in 2019. c) What was the predetermined overhead rate for 2019? d) Calculate the overhead applied to production in 2019
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