The following costs are attributed to the Gandalf and Company: Purchase of raw materials (all direct) $291,100; Direct labour cost 141,800; Manufacturing overhead costs 198,100. Change in inventories: Decrease in raw materials $9,100; Decrease in work in process 4,100; Decrease in finished goods 13,200; Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost.

Submission Instructions:

1. Calculate the cost of goods manufactured.

2. What was the cost of goods sold before adjusting for any under or over applied overhead?

3. By how much was manufacturing overhead cost under or over applied?

Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost.