Question 34 Nicole Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies manufacturing overhead to production using a predetermined rate. This overhead rate is set at the beginning of each fiscal year by forecasting the year's overhead and relating it to direct labour costs. The budget for 2020 was as follows: Direct labour $1,802,000 Manufacturing overhead 901,000 As at the end of the year, two jobs were incomplete. These were 1768B, with total direct labour charges of $110,100, and 1819C, with total direct labour charges of $390,700. On these jobs, machine hours were 287 hours for 1768B and 647 hours for 1819C. Direct materials issued for 1768B amounted to $222,000, and for 1819C they amounted to $420,800. Total charges to the Manufacturing Overhead Control account for the year were $899,000, and direct labour charges made to all jobs amounted to $1,574,400, representing 247,600 direct labour hours. There were no beginning inventories. In addition to the ending work in process just described, the ending finished goods inventory account showed a balance of $557,600. Sales for the year amounted to $6,202,300; cost of goods sold totalled $3,624,400; and sales, general, and administrative expenses were $1,854,300. The above amounts for inventories and the cost of goods sold have not been adjusted for any over- or under-application of manufacturing overhead to production. It is the company's practice to allocate any over- or under-applied overhead to inventories and the cost of goods sold. Calculate the under- or over-applied manufacturing overhead for 2020. (Round answer to the nearest whole dollar, e.g. 5,275.) Manufacturing overhead Prorate the amount calculated in part (a) based on the ending balances (before prorating) of Work in Process, Finished Goods, and Cost of Goods Sold. (Round allocation percentage to 2 decimal places, e.g. 15.25% and final answers to the nearest whole dollar, e.g. 5,275.) Prorate the amount calculated in part (a) based on the ending balances (before prorating) of Work in Process, Finished Goods, and cost of Goods Sold. (Round allocation percentage to 2 decimal places, e.g. 15.25% and final answers to the nearest whole dollar, e.g. 5,275.) Allocation Cost of goods sold $ Finished goods inventory WIP inventory Total $ Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement For the Month Ended 2020 For the Year Ended 2020 Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Operating expenses Beginning balance, January 1 Sales Ending balance, December 31 Taxes Net income before taxes Adjusted cost of goods sold Gross profit/ (Loss) Net income / (Loss) $ Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Less Add Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Taxes Ending balance, December 31 Net income before taxes Gross profit/ (Loss) Sales Net income / (Loss) Adjusted cost of goods sold Operating expenses Beginning balance, January 1 Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Adjusted cost of goods sold Net income before taxes Taxes Ending balance, December 31 Sales Gross profit/ (Loss) Operating expenses Net income /(Loss) Beginning balance, January 1 $ Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Add Less Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Taxes Operating expenses Beginning balance, January 1 Ending balance, December 31 Sales Adjusted cost of goods sold Net income before taxes Gross profit/(Loss) Net income /(Loss) Question Attempts: 0 of 2 used Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Adjusted cost of goods sold Gross profit /(Loss) Sales Net income / (Loss) Beginning balance, January 1 Operating expenses Net income before taxes Taxes Ending balance, December 31 Question Attempts: 0 of 2 use Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement $ Adjusted cost of goods sold Beginning balance, January 1 Net income / (Loss) Ending balance, December 31 Net income before taxes Taxes Operating expenses Gross profit/(Loss) Sales Question Attempts: 0 of 2 used Ins, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Prepare an income statement for the company for the year. The income tax rate is 40%. (Round answers to the nearest whole dollar, e.g. 5,275.) NICOLE LIMITED Income Statement Operating expenses Net income before taxes Taxes Ending balance, December 31 Net income / (Loss) Gross profit/(Loss) Sales Beginning balance, January 1 Adjusted cost of goods sold Question Attempts: 0 of 2 used Ins, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc