Question
The Ilarion Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead
The Ilarion Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct labor dollars. The company has provided the following data. |
Inventories | Beginning | Ending | ||
Raw materials | $ | 29,000 | $ | 11,000 |
Work in process | $ | 45,000 | $ | 36,000 |
Finished goods | $ | 71,000 | $ | 61,000 |
The following actual costs were incurred during the year: |
Purchase of raw materials (all direct) | $ | 130,000 |
Direct labor cost | $ | 86,000 |
Actual manufacturing overhead costs: | ||
Insurance, factory | $ | 8,800 |
Depreciation of equipment | $ | 17,000 |
Indirect labor | $ | 32,700 |
Property taxes | $ | 8,500 |
Maintenance | $ | 13,000 |
Rent, building | $ | 36,000 |
2.Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials. Ilarion Manufacturing CompanySchedule of Cost of Goods ManufacturedFor the Year Ended December 31Direct Materials:Total raw materials availableRaw materials used in productionTotal manufacturing costCost of goods manufactured |
3. | Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)
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