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1. Bakerston Company is a manufacturing firm that uses job-onder costing. The company's inventory bal- ances were as follows at the beginning and end of
1. Bakerston Company is a manufacturing firm that uses job-onder costing. The company's inventory bal- ances were as follows at the beginning and end of the year. Raw materials Work in process Finished goods Beginning Balance $14,000 $27,000 $62,000 Ending Balance $22.000 $9,000 $77.000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,000 machine hours and incur 5231,000 in manufacturing overhead cost. The following transactions were recorded for the year: - Raw materials were purchased. $315.000 (there were no Indirect Materials at this company). The following employee costs were incurred: direct labor, $377,612, indirect labor, 595,110, and ad- ministrative salaries, $172,000. Selling costs, $147.887. Factory utility costs, $10,919. Depreciation for the year was $127,000 of which S120,000 is related to factory operations and $7.000 is related to selling, general, and administrative activities. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 31,823 ma- chine-hours. (Hint: you must calculate the predetermined overhead rate per machine hours and use it to apply overhead). Required (3 Points): a. Prepare a schedule of cost of goods manufactured b. Calculate Cost of Goods Sold (do not close the over- or under-applied Mfg. Overhead). c. Was the overhead underapplied or overapplied? By how much
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