WYOMING CORPORATION

The following information comes from the accounting records of WYOMING CORPORATION, manufacturer of custom coffee mugs, for its manufacturing activities for the year ended September $302018$:

Actual manufacturing overhead costs incurred:

Indirect materials $$15,000$

Indirect labor $130,000$

Property taxes $-$ factory $8,000$

Utilities $-$ factory $70,000$

Depreciation $-$ factory $240,000$

Insurance $-$ factory $10,000$

Total actual manufacturing overhead incurred $$473,000$

Other costs charged to jobs:

Direct materials $$375,000$

Direct labor $60,000$

Inventory information:

Work in process, beginning $$40,000$

Work in process, ending $70,000$

Finished goods, beginning $120,000$

Finished goods, ending $135,000$

The company uses a predetermined overhead rate to apply overhead to production on the basis of machine hours, since coffee$-$mug production is a highly automated process. Overhead for the year was originally budgeted at $$475,000$ and $19,000$ machine hours were anticipated.

During the year, based on all of the jobs produced, a total of $19,400$ machine hours were recorded for the year.

REQUIRED:

$1.$ Why would the fact that production is highly automated have anything to do with the company$$s chose of machine hours as a basis for allocating overhead? WHY?

$2.$ What was the predetermined overhead rate for the year?

$3.$ What was the amount of overhead applied for the year?

$4.$ USE T$-$ACCOUNTS to post all summary journal entries from the information above. Note: when posting the amounts for actual overhead, use separate T accounts for each of the $6$ items shown above in order to make a complete entry.

$5.$ What was the amount of mis$-$applied overhead for the year? Explain how to account for this and WHY that is proper.

$6.$ Construct a schedule of raw materials used in production for the year ended September $30,2018.$

$7.$ Construct a Schedule of Cost of Goods Manufactured for the year ended September $30,2018.$

$8.$ Determine the cost of goods sold, and construct a Schedule of Cost of Goods Sold for the year ended September $30,2018.$

$9.$ Prepare an income statement for WYOMING for the year ended September $30,2018($ignore income taxes$).$

$10.$ Prepare the Inventory section of the Balance Sheet as of September $30,2018.$