The P Ditty Company applies to overhead to jobs using a predeterminded overhead rate based on Direct labor hours. At the beginning of the year, the company estimated that it would work 21,000 direct labor hours and estimated it would incur $315,000 in manufacturing overhead cost. The following transactions were recorded for the year.
Raw Materials beginning balance - $35,000 ending balance $11000
Work in process begin balance - $87,000 ending bal $33000
Finished goods beginning balance - $23,000 ending bal $17000
*Raw materials were purchased $359,000
*Raw materials were requistioned for use in production, $368,000 for direct and $15000 indirect
*Factory utility cost were $39,000 and utility cost for administrative is $2000
*Depreciation for the year was $89,000; of which $68,000 was for factory operations and $21000 was for selling and administrative activities.
*Manufacturing overhead costs were paid (property taxes, insurances, etc) in the amount of $123,000
*Labor costs were as follows: Direct labor $451000 and Indirect labor was $37000; administrative salaries were $125,000.
*Selling costs $65000
*MOH was applied to jobs using the predetermined rate. The actual direct labor hours were 19000
*Sales for the year is $1404000
1. Prepare a schedule of cost of goods manufactured - in good form
2. Prepare a schedule of Cost of goods Sold - in good form
3. Prepare an income statement - The company closes an underapplied or overapplied manufacturing overhead to costs of goods sold
4. What is the percent of gross margin and operating income