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Sandhill Limited is a company that produces machinery to customer orders, using a normal job-order cost system. It applies manufacturing overhead to production using
Sandhill 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 2022 was as follows: Direct labour $1,808,000 Manufacturing overhead 904.000 As at the end of the year, two jobs were incomplete. These were 17688, with total direct labour charges of $111,400, and 1819C, with total direct labour charges of $391.000. Machine hours were 287 hours for 17688 and 647 hours for 1819C Direct materials issued for 17688 amounted to $230,000, and for 1819C they amounted to $420.100. Total charges to the Manufacturing Overhead Control account for the year were $898,000, and direct labour charges made to all jobs amounted to $1.583,400, representing 247.900 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 $561,480 Sales for the year amounted to $6.210.300 cost of goods sold totalled $3.649.620; and sales, general, and administrative expenses were $1,855,500. 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 (a) Your answer is correct Calculate the under or over-applied manufacturing overhead for 2022 Manufacturing overhead 106300 Under-applied Attempts: 1 of 2 used (b) 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. eg. 15.25% and final answers to the nearest whole dollar, eg. 5.275.) Cost of goods sold Finished goods inventory WIP inventory Total Allocation
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